BlackRock is to take a 4.9% stake in Envestnet as part of a deal that will see the asset manager's digital wealth technology integrated into Envestnet’s platform.
BlackRock will purchase approximately 2.36 million shares of Envestnet common stock at $52.13 per share, amounting to approximately $122.8 million in total.
In addition, Envestnet will issue BlackRock a warrant to purchase a further 470,000 shares of Envestnet common stock at an exercise price of $65.16 per share. The warrant can be exercised by BlackRock four years from the date of issue.
BlackRock’s digital wealth unit was formed in October 2017 as a platform to consolidate the firm’s technology products such as iRetire, FutureAdvisor and Aladdin. The unit is led by chief operating officer Rob Goldstein and global chief marketing officer Frank Cooper, who serve as co-chairs of the unit.
BlackRock's retirement planning tool iRetire, BlackRock Advisor Center and robo-advisor FutureAdvisor, are the three technology applications to be integrated into the Envestnet platform.
'The power of the integration is in the way that we will be able to take the work that the advisor does in BlackRock tools and seamlessly transition that work into the Envestnet platform for account opening and fulfillment,' said Lincoln Ross, head of product management and marketing at Envestnet.
'So it really creates a seamless, frictionless experience for the advisor to go from portfolio construction in the BlackRock tool all the way through to the account opening and fulfillment on the Envestnet platform,' he added.
'Envestnet is uniquely positioned to create the premier financial wellness network. Integrating BlackRock digital wealth offerings into the Envestnet platform represents an industry milestone, advancing advisors’ ability to help investors meet their financial goals,’ said Bill Crager, president of Envestnet.
'As wealth managers shift to fee-based advisory relationships, they are asking for new technologies to help them scale their business and build better portfolios,’ said Venu Krishnamurthy, global head of digital wealth for BlackRock. ‘Through this strategic relationship, we aim to bring BlackRock digital wealth’s solutions to Envestnet’s clients in a modern, highly integrated way.’
The deal is expected to closed before the end of 2018, subject to customary closing conditions including clearance under the the Hart-Scott Rodino Antitrust Improvements Act.
BlackRock had approximately $6.44 trillion in assets under management as of September 30.