Black River Asset Management is splitting itself into three employee-owned investment boutiques.
After a “careful, thoughtful review” that ended late last week, Black River’s board of directors and senior managers decided to allow management buyouts of Black River’s three main investment strategies, said Lori Johnson, a spokeswoman for Cargill, which owns independently managed Black River.
Two of the strategies are hedge fund strategies — fixed-income relative value, with assets of $1.8 billion, and emerging markets debt, with about $500 million. Black River’s $2.3 billion private equity unit will be the third new boutique.
Further details about who will be running each of the firms and the timing of the management buyouts remain to be determined, Ms. Johnson said, noting the goal is to have the dismantling of Black River completed by May 31, the end of Cargill’s fiscal year.
Ms. Johnson said Cargill will remain an investor in the strategies of each of the new money managers.
As part of the breakup, Gary Jarrett, CEO of Black River, will leave the firm on Oct. 1, and two commodity pools now managed by Black River will be moved to Cargill Risk Management.
In July, Black River announced that it was liquidating four hedge fund strategies that invested in equities, emerging markets, commodities and a geographically focused fund that invested in Europe, the Middle East and Africa. The collective assets of the shuttered funds totaled about $1 billion.
As of June 30, Black River reported total assets of $7.4 billion, according to Pensions & Investments’ annual hedge fund special report, of which $5.2 billion was managed in hedge funds worldwide, with the balance in private equity funds.
Bloomberg contributed to this story.