By Christopher Robbins, FA-Mag.com
BlackRock is buying a stake in Envestnet as the companies announce a new technology-driven partnership.
As part of the deal, the two companies will integrate BlackRock Digital Wealth’s technology into Envestnet’s platform, according to an announcement by BlackRock.
As both firms offer wealth management and investment technology for financial advisors, the new relationship is intended to broaden the solutions available via the Envestent platform.
“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, BlackRock global head of digital wealth, in a released statement. “Through this strategic relationship, we aim to bring BlackRock Digital Wealth’s solutions to Envestnet’s clients in a modern, highly integrated way.”
BlackRock is acquiring a 4.9 percent equity stake in Envestnet through the $122.8 million purchase of 2.36 million shares at the price of $52.13 per share.
Envestnet is also issuing to BlackRock a warrant to purchase 470,000 Envestnet shares at an exercise price of $65.16 per share, exercisable at the option of BlackRock four years from the date of issue.