BlackRock Inc. ( BLK ) , the world’s largest asset manager, is reportedly in preliminary discussions to acquire an equity stake in Millennium Management, one of the leading hedge fund managers.

What Happened: BlackRock ( BLK ) is considering a strategic partnership with Millennium Management, the Financial Times reported, citing sources familiar with the matter.

This potential deal would mark the first time in Millennium’s 35-year history that its founder, Izzy Englander, has accepted external investment in the management company.

Although the size of the equity stake is expected to be modest, the move underscores BlackRock’s ambitions to expand into alternative investments. The talks are still in the early stages and may not result in a deal, the sources said.

Both BlackRock ( BLK ) and Millennium did not immediately respond to Benzinga's request for comment.

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Why It Matters: BlackRock’s interest in Millennium comes amid its broader push into the alternative investments sector, which carries higher fees than traditional investment funds. Earlier in the year, BlackRock ( BLK ) made significant acquisitions in this space, including Global Infrastructure Partners and Preqin, according to the report.

BlackRock’s CEO Larry Fink has been vocal about the potential of alternative investments and the need for diversification.

Meanwhile, Millennium Management has been exploring various options for strategic partnerships and external investments. Last month, the hedge fund manager was in talks to invest billions with Schonfeld Strategic Advisors, but the discussions were called off.

Despite the interest from various parties, Englander, the founder of Millennium, has maintained 100% ownership of the company, according to the report.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote