BlackRock to Acquire Fund of Funds Business from Quellos Group, LLC, Expanding Alternative Investment Management Capabilities

    NEW YORK, June 26 /CNW/ - BlackRock, Inc. (NYSE:  BLK) and Quellos Group,
LLC today announced that they have entered into a definitive agreement under
which BlackRock will acquire the fund of funds business of Quellos for up to
$1.7 billion. The combined business will comprise one of the largest fund of
funds platforms in the world, with over $25.4 billion in assets under
management. Products, including hedge, private equity and real asset fund of
funds, as well as specialty and hybrid offerings, are managed on behalf of
institutional and individual investors worldwide.

    Under the terms of the transaction, which has been approved by the Board
of Directors of BlackRock, Quellos Group, LLC will receive at closing $562
million in cash and $188 million in BlackRock common stock. In addition,
Quellos Group, LLC may receive up to an additional $970 million in cash and
stock over three and a half years contingent on certain measures. A
substantial portion of after-tax cash proceeds will be reinvested for ten
years in products managed by the fund of funds investment professionals.

    "We are extremely excited to welcome the Quellos team to BlackRock,"
commented Laurence D. Fink, BlackRock Chairman and CEO. "We have worked with
Quellos for a number of years as a sub-advisor for their clients. We have long
admired the discipline with which they have built and continue to operate
their alternative investment business.

    "Following closing, we will combine our hedge and private equity fund of
funds activities on a unified platform. This will bring together a strong
line-up of complementary products and exceptionally talented and experienced
professionals who share a commitment to disciplined investment processes using
extensive risk management capabilities. Importantly, the teams also share a
client-centric culture that reflects their passion for investment and
operational excellence.

    "In the face of challenging market and business conditions, our clients
around the globe are pursuing a wider array of investments and strategies,
including absolute return products, portable alpha and liability-driven
investing. Fund of funds are being more widely used in these strategies and
the combined expertise of BlackRock and Quellos will enhance our ability to
deliver innovative solutions to our clients worldwide."

    Jeffrey Greenstein, CEO of Quellos has announced his intention to retire
concurrent with the closing. He has agreed to serve as an advisor to BlackRock
to assist in the transition. Bryan White, Quellos' Chief Investment Officer,
will serve as global head of the combined fund of funds platform, which will
be branded under the name BlackRock Alternative Advisors. There are no changes
expected to the investment strategy or style of existing offerings, each of
which will continue to be managed by members of their existing portfolio
management teams. Additionally, clients will benefit from Quellos' tailored
fund of funds research and client reporting systems, which complement
BlackRock's overall capabilities in global risk management.

    The fund of hedge funds business will be integrated and will benefit from
the substantially greater research, technology, risk management and
operational capabilities of the broader business. Howard Berkowitz will
continue to lead investment strategy for BlackRock's existing fund of hedge
funds and will serve as Chairman of the Investment Strategy Forum for the
combined absolute return business.

    The private equity effort will include two very strong teams, each of
which will continue to manage their products in their respective styles.
Specifically, Russ Steenberg will continue to lead BlackRock's existing
private equity fund of funds business, which invests in primary funds,
secondary funds and direct co-investment opportunities through core fund of
funds, direct co-investment programs and other offerings. Gene McDonald will
continue to lead the Quellos private equity fund of funds team, which manages
both private equity and real asset funds of funds with an emphasis on
growth-oriented and venture capital managers. The teams will benefit from each
other's insights and expertise, as well as the leverage afforded by the
resources of the larger fund of funds platform.

    Mr. Greenstein remarked, "As co-founder of Quellos, I am incredibly proud
of the accomplishments of our team and the confidence our clients have shown
in us. Recognizing the future of investment management, we are convinced that
partnering with one of the world's leading asset managers will afford
significant strategic benefits for our clients and great opportunities for our
employees. I look forward to ensuring a seamless transition for all of our
clients and employees."

    Mr. White added, "The decision to join forces with BlackRock was
straightforward: we share a commitment to risk management and disciplined
investment processes, sophisticated investment technology, a
solutions-oriented approach to working with clients, and a culture of
innovation and excellence. We look forward to leveraging our capabilities and
BlackRock's global reach to better serve investors throughout the world."

    As has been previously reported, Quellos has been named in a number of
civil lawsuits in connection with activities related to certain tax
strategies. These businesses, which were always separate and distinct from
Quellos' fund of funds business, were discontinued a number of years ago.
Certain of these activities are the subject of ongoing governmental
investigations and Quellos is continuing to cooperate with these inquiries.
None of these activities will be acquired and none of the related potential
liabilities will be assumed by BlackRock in this transaction.

    BlackRock's acquisition of Quellos' fund of funds business is expected to
close on or about October 1, 2007, pending regulatory approvals and
satisfaction of other customary closing conditions. The combined business will
maintain a significant presence in Seattle, Washington.

    BlackRock was advised by Citi and Skadden Arps. Quellos was advised by
UBS and Paul, Weiss.

    BlackRock Conference Call & Investor Presentation

    Laurence Fink and Paul L. Audet, Chief Financial Officer of BlackRock,
will host a teleconference call for investors and analysts on Tuesday, June
26, 2007, at 9:00 a.m. (Eastern Time) to discuss this announcement. Members of
the public who are interested in participating in the teleconference should
dial, from the United States, (800) 374-0176, or from outside the United
States, (706) 679-4634, shortly before 9:00 a.m. and reference the BlackRock
Conference Call (ID Number 5426970).

    The teleconference will be available for replay by 12:00 p.m. on Tuesday,
June 26, 2007, and ending at midnight on Tuesday, July 3, 2007. To access the
replay of the teleconference, callers from the United States should dial (800)
642-1687 and callers from outside the United States should dial (706) 645-9291
and enter the Conference ID Number 5426970.

    An investor presentation will also be available in the Investor Relations
section of BlackRock's website at prior to the beginning of
the teleconference call.

    About BlackRock

    BlackRock is one of the world's largest publicly traded investment
management firms. As of March 31, 2007, assets under management were $1.154
trillion. The firm manages assets on behalf of institutions and individuals
worldwide through a variety of equity, fixed income, cash management and
alternative investment products. In addition, a growing number of
institutional investors use BlackRock Solutions(R) investment system, risk
management and financial advisory services. Headquartered in New York City,
the firm has approximately 5,000 employees in 18 countries and a major
presence in key global markets, including the U.S., Europe, Asia, Australia
and the Middle BlackRock. For additional information, please visit the
Company's website at

    About Quellos

    Quellos is among the largest fund of funds manager in the world with over
$20 billion of assets managed across a variety of alternative investment
products as of first quarter 2007. Clients include public and private pension
plans, foundations, endowments, official institutions, financial institutions
and high net worth investors. Quellos was founded in 1994 by Jeffrey
Greenstein and Bryan White, and today consists of more than 290 employees in
its Seattle (WA) headquarters, New York, Durham (NC), London and Hong Kong.

    Forward-Looking Statements

    This press release, and other statements that BlackRock may make, may
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act, with respect to BlackRock's future financial
or business performance, strategies or expectations. Forward-looking
statements are typically identified by words or phrases such as "trend,"
"potential," "opportunity," "pipeline," "believe," "comfortable," "expect,"
"anticipate," "current," "intention," "estimate," "position," "assume,"
"outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and
similar expressions, or future or conditional verbs such as "will," "would,"
"should," "could," "may" or similar expressions.

    BlackRock cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date they are made, and
BlackRock assumes no duty to and does not undertake to update forward-looking
statements. Actual results could differ materially from those anticipated in
forward-looking statements and future results could differ materially from
historical performance.

    In addition to factors previously disclosed in BlackRock's SEC reports
and those identified elsewhere in this communication, the following factors,
among others, could cause actual results to differ materially from
forward-looking statements or historical performance: (1) the introduction,
withdrawal, success and timing of business initiatives and strategies; (2)
changes in political, economic or industry conditions, the interest rate
environment or financial and capital markets, which could result in changes in
demand for products or services or in the value of assets under management;
(3) the relative and absolute investment performance of BlackRock's investment
products, including its separately managed accounts and the former MLIM
business; (4) the impact of increased competition; (5) the impact of capital
improvement projects; (6) the impact of future acquisitions or divestitures;
(7) the unfavorable resolution of legal proceedings; (8) the extent and timing
of any share repurchases; (9) the impact, extent and timing of technological
changes and the adequacy of intellectual property protection; (10) the impact
of legislative and regulatory actions and reforms and regulatory, supervisory
or enforcement actions of government agencies relating to BlackRock, Merrill
Lynch or PNC; (11) terrorist activities and international hostilities, which
may adversely affect the general economy, domestic and local financial and
capital markets, specific industries, and BlackRock; (12) the ability to
attract and retain highly talented professionals; (13) fluctuations in foreign
currency exchange rates, which may adversely affect the value of advisory fees
earned by BlackRock; (14) the impact of changes to tax legislation and,
generally, the tax position of the Company; (15) BlackRock's ability to
successfully integrate the MLIM business with its existing business; (16) the
ability of BlackRock to effectively manage the former MLIM assets along with
its historical assets under management; (17) BlackRock's success in
maintaining the distribution of its products and (18) the ability of BlackRock
to consummate the transaction with Quellos and realize the benefits of such

    BlackRock's Annual Reports on Form 10-K and BlackRock's subsequent
filings with the SEC, accessible on the SEC's website at
and on BlackRock's website at, discuss these factors
in more detail and identify additional factors that can affect forward-looking
statements. The information contained on our website is not a part of this
press release.

For further information:

For further information: Media: BlackRock Walter Montgomery,
646-805-2022 or Quellos Michael Gross, 646-805-2003 or IR: Brian Beades,

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