BlackRock (BLK) liquidated its BlackRock Public-Private Investment Fund, a portion of the U.S. Treasury's program of partnering with money managers as part of an overall strategy for economic recovery following the financial crisis, confirmed BlackRock spokesman Brian Beades.
The fund had an internal rate of return, net of fees and expenses, of 23.5% since its inception in October 2009.
The Treasury, which made an equity investment of $528.2 million, received $917.1 million in distributions. BlackRock also repaid with interest the $1.09 billion in debt the Treasury provided to the fund.
BlackRock deployed more than 75% of the $2.78 billion committed — $695 million in equity commitments each from the Treasury and other investors and $1.39 billion in committed debt. Clients that participated include public pension funds, insurers and sovereign wealth funds, Mr. Beades said.
“As with all of our investments, our primary goal is to maximize the return for all of our investors, including Treasury, through a carefully constructed risk framework,” said Robert S. Kapito, president and a director of BlackRock, in a news release. “When considering and integrating the goals of the program with current conditions of the marketplace, we believed optimization of the fund's investment objectives was achieved through timely liquidation.”
Among other PPIP funds, Invesco (IVZ) announced in April that it had liquidated its $3.4 billion Legacy Securities Master Fund, with the Treasury receiving a total of $791 million on its initial equity investment of $581 million and the repayment plus interest of $1.2 billion in loans. The Treasury also received $1.54 billion in distributions on a $1.06 billion equity investment in AllianceBernstein (AB)'s Legacy Securities Fund as well the repayment plus interest of $2.13 billion in loans. AllianceBernstein liquidated its fund Oct. 9. TCW Group in January 2010 liquidated its fund shortly after it was started following the termination of bond manager Jeffrey Gundlach.