US-based agricultural giant Cargill said that it is planning to spin off its investment firm Black River Asset Management into three separate employee-owned firms.
Also, Black River will move two commodity funds that trade agriculture and energy to Cargill’s risk-management unit.
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The three independent companies will focus on different business streams including $2.2bn fixed income relative value fund led by CIO Jeff Drobny, an emerging markets credit business and a private equity business managing three funds focusing on food, agricultural land and metals and mining.
The transactions, which are expected to take place during the next several months, come as Cargill aims to enhance returns amid volatile commodity markets and weakness in the emerging economies.
Cargill will remain as an investor in the three firms, while some of Black River’s current assets will remain under Cargill’s financial services arm. The terms of the deal have not been disclosed.
In July 2015, Black River decided to close four of its hedge funds and return more than $1bn to investors due to lack of investor demand.
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By GlobalDataA board composed of Cargill and Black River executives along with their management teams had been conducting a strategic review of the Cargill subsidiary. Following the review, the board said that the employee-owned firms would create better alignment and position each team to best serve investors.
As part of the move, Black River CEO Gary Jarrett will retire from the firm on 1 October 2015.
Black River had managed $7.4bn in assets under management as of June 2015.
