Bank of America to sell $87-bn money-market fund business to BlackRock

Bank of America Corp (BofA) yesterday struck a deal to sell its $87-billion money-market fund business to the world's largest money manager BlackRock Inc for an undisclosed sum.

The transaction is expected to increase BlackRock's global cash-management business to $372 billion from about $285 billion.

BlackRock said that through BofA Global Capital Management, clients currently have access to a suite of taxable and tax-exempt money market funds; a US dollar offshore fund; and customised separate account strategies.

''The transaction will combine BlackRock's global cash management expertise and product suite with BofA Global Capital Management's client relationships, resulting in a platform of quality, global liquidity investment solutions accessible to a broader spectrum of clients.

"Expanding our partnership with Bank of America presents a tremendous growth opportunity for BlackRock's cash management business. This partnership allows us to further leverage our global scale, comprehensive product suite and best-in-class risk management capabilities to serve a new universe of clients,'' said Tom Callahan, BlackRock's co-head of global cash management.

''At a time of tremendous change in the cash management industry, this alliance underscores BlackRock's commitment to market leadership in delivering outstanding liquidity solutions to our clients," said Rich Hoerner, BlackRock's co-head of global cash management.

''BlackRock and existing BofA Global Capital Management clients will benefit from a combined platform with greater scale and global reach,''

''The transaction is consistent with Bank of America's ongoing efforts to simplify our business, in this instance by outsourcing certain product manufacturing functions to an industry leader,'' said, Susan McCabe, a BofA spokeswoman, in a statement. ''Rather than manufacture liquidity solutions in-house, the bank will focus on delivering best-in-class liquidity products solely from third-party providers.''

The transaction is expected to be completed in the first half of next year.