BlackRock Buys SpiderRock for SMA Buildout

BlackRock Inc., the world's largest asset manager with $10 trillion AUM, plans to acquire Chicago-based SpiderRock Advisors to specialize on SMA.

New York-based BlackRock's share will rise from 25% in 2021 to 100% in July's deal. “I think this was always their intention, and it was our hope that they would acquire the entire business,” SpiderRock president, chief investment officer, and co-founder Eric Metz told

Since 2015, SpiderRock has evolved into a $4.8 billion options overlay platform for financial advisors and institutional investors. SpiderRock said in February that it would employ put and call options on the most liquid spot bitcoin ETFs to develop collars to decrease cryptocurrency volatility.

We see this as the biggest opportunity in the space,” SpiderRock managing director Dave Donnelly said. “The ability to hedge an outstanding universe of crypto is probably the biggest story for wealth managers using these products,” he said.

Over the past three years as a SpiderRock minority owner, BlackRock has valued innovation. “We needed to execute the partnership to build things out and mesh with their larger organization,” Metz added. It was strategic for both sides.”

Metz said BlackRock's 2021 acquisition of separate account and tax-optimization platform Aperio shows where the asset manager is going and why SpiderRock fits in. “BlackRock pursued listed derivatives and options overlays because we were ahead of the curve,” he said.

Nate Geraci, president of The ETF Store in Overland Park, Kan., said BlackRock is exploring customized portfolio products in financial advisory. According to him, advisers are liking options-based strategies, thus BlackRock should extend its services in this category. I expect them to expand access to this area, mostly through SMAs and ETFs.”

Although the SpiderRock merger is still pending shareholder approval, BlackRock acknowledges its growing focus on its $186 billion separately managed accounts platform in its U.S. Wealth Advisory division.

"In today's market, advisors and clients want investor outcomes and personalized solutions," said Eve Clout, BlackRock Wealth Advisory's Portfolio Design & Solutions head. She noted that adding choices overlay techniques to the SMA platform will allow advisors scale to offer more advanced customization to all clients.