Is there profit to be made in structured credit, securitized assets and leveraged finance? One of the world's best-regarded asset managers is betting on it.
BlackRock Inc. recently hired two well-known structured credit executives from Merrill Lynch and Wachovia, and also acquired a credit hedge fund.
BlackRock, which manages $1.3 trillion in fixed-income, equity and alternative assets, last week acquired R3 Capital Management, a hedge fund firm specializing in credit, leveraged finance and distressed assets. More than 40 R3 employees based in New York, London and Singapore will join BlackRock, a R3 spokesman told Pensions & Investments. The story names 10 who join BlackRock as managing directors. They include founder Rick Rieder along with Paul Tice, a leveraged finance specialist.
Mortgage/CDO Executive Hired From Wachovia
Separately, Akiva Dickstein, head of Merrill Lynch's U.S. rates and structured credit research group, joined BlackRock to manage mortgage portfolios. His focus will be "top-down" areas such as portfolio construction and asset allocation, according to Pensions & Investments.
BlackRock also hired Randy Robertson, head of Wachovia Capital Markets' residential mortgage and consumer group and co-head of residential CDOs. Robertson will co-lead BlackRock's securitized assets team.
The moves mark a ramping up of BlackRock's presence in alternative fixed-income. The money management firm has fared better than most counterparts amid the market meltdown, and has become one of the top advisors helping the U.S. government manage troubled mortgage assets. However, BlackRock laid off 500 people or 9 percent of its staff last November.
Chief Executive Lawrence Fink referred to the R3 purchase in Tuesday's first-quarter earnings report. "We continue to position the firm to capitalize on unique opportunities to further strengthen our talent base and expand our capabilities. We executed on one such opportunity last week when the R3 team, led by Rick Rieder, agreed to join BlackRock," Fink said.
Price of the deal wasn't disclosed. R3 has $1.5 billion under management. Rieder is a former executive at Lehman Brothers, which at one time owned part of R3.