With Morgan Stanley stepping away from a deal with New York based money manager BlackRock Inc., Merrill Lynch has stepped up to the plate. The wirehouse is now in talks to acquire a minority stake in BlackRock for a reported $8 billion in exchange for its fund business.

The Wall Street Journal reported the possible deal Monday morning. BlackRock, is best known as an institutional asset manager specializing in fixed income investments. Last year, it diversified its portfolio by purchasing State Street Research from MetLife.

All counted, BlackRock manages $414 billion in client assets, including roughly $94 billion in mutual fund assets, according to the 2006 Money Market Directory.

While Morgan Stanley would have obtained a majority stake in the firm, Merrill is considering a stake of less than 50 percent of BlackRock.

Currently, PNC Bank also holds a stake in BlackRock. 

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