Despite the onset of summer, the M&A space remains highly active in 2017, with asset management giant BlackRock (NYSE: BLK) entering into an agreement to acquire Cachematrix. The deal will help strengthen BlackRock’s global liquidity management while also paving the way for the development of a newly consolidated cash and investment interface for clients – terms of the deal were not presently disclosed.
BlackRock is one of the largest asset managers globally, boasting nearly $390 billion in total assets for a consortium of banks, corporations, and other entities. Its decision to buy Cachematrix, a financial technology provider, constitutes the group’s latest effort to revamp its cash management capabilities and interface in light of fundamental shifts in both US and European regulations.
Corporate client focus
Indeed, the needs of cash investors are certainly changing, a phenomenon BlackRock opted to address with the new acquisition. By joining forces with Cachematrix, BlackRock will be able to further enhance its own technology suite, leveraging the former’s cash management process and open-architecture platform. Presently, Cachematrix supports nearly $200 billion in client assets, making the newly formed operations one of the industry’s largest.
BlackRock specifically chose Cachematrix for its diverse cash management suite that includes its corporate clients portal that helps cater to a wide range of clients. Its offering includes an emphasis on money market funds and direct cash instruments, in tandem with compliance checks and other detailed reporting – an obvious area of focus given the recent and upcoming changes in regulation.
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The move also extends BlackRock’s momentum in the cash management space, which recently assimilated the transfer of investment responsibility for more than $80 billion in cash management assets from Bank of America Global Capital Management. The deal will also look to add a new dimension to BlackRock’s existing global liquidity management capabilities.
More specifically, this will see the integration of Cachematrix’s management functionality and analytics. With a newly retooled and streamlined interface, BlackRock will be looking to target existing bank clients to help address corporate cash clients’ changing needs as well as an expansion of its operational, analytical, and investment capabilities.
Tom Callahan, Head of BlackRock’s Global Cash Management Business, commented: “Regulatory changes in both the US and Europe have fundamentally changed the needs of cash investors. In addition to world class products, cash investors now require new tools to streamline liquidity management and better manage risk.”
“Building on BlackRock’s strength and scale in the cash management space and leadership position in technology and risk management, this transaction reinforces our commitment to adapt our business for clients’ evolving needs, and to be the leading provider of comprehensive cash management solutions.”
“Joining forces with BlackRock will enhance our ability to deliver technology solutions that simplify cash management for banks and their corporate clients. Together we will broaden our reach with best-in-class financial technology and world-class investment products to help clients address their liquidity needs,” reiterated George Hagerman, Chairman and founder of Cachematrix.
The acquisition is the latest deal for BlackRock since its partnership with IG Group back in April that saw the launch of a new Smart Portfolio offering for retail clients. The product consisted of model investment portfolios with asset allocation advice from BlackRock.