BlackRock Inc. has agreed to purchase an $87 billionmoney-market fund business from Bank of America Corp. as it buildsscale in an industry grappling with new regulations.
The deal will involve merging Bank of America money funds andseparate accounts into BlackRock's offerings, the New York-basedasset manager said Tuesday in a statement. This will bringBlackRock's cash-management business to about $372 billion inassets.
BlackRock is expanding the business as it contends with interestrates that have remained near historic lows in the wake of the 2008financial crisis. Managers are restructuring money-market funds tocomply with U.S. Securities and Exchange Commission (SEC) rules that forceinstitutional prime funds to adopt a floating share price.Banks are also dealing with Basel III requirements, which make it more expensive to hold bigcash deposits.
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