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Barclays Global Investors

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Barclays Global Investors

Not to be confused with Blackstone Group, a private equity and alternative investments firm. For other uses, see Black Rock.
BlackRock, Inc.
Public
Traded as S&P 500 Component
Industry Investment management
Founded 1988
Headquarters New York City, USA
Area served Worldwide
Key people Laurence Fink
(Chairman & CEO)
Robert Kapito (President)
Products Asset management
Revenue Increase US$ 9.3 billion (2012)[1]
Net income Increase US$ 2.438 billion (2012)[2]
AUM Increase US$ 4.096 trillion (2013)[3]
Total assets Increase US$ 178.4 billion (2010)
Total equity Increase US$ 45.3 billion (2013)
Employees 10,100 (2011)[1]
Website

BlackRock, Inc. is a U.S. based multinational investment management corporation based in New York City. As the world's largest asset manager,[4] BlackRock is a leading provider of investment, advisory and risk management solutions. The company acquired Barclays Global Investors in December 2009, solidifying its position as the largest investment manager in the world. As of September 30, 2013, BlackRock had $4.096 trillion in assets under management.[5]

Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock has evolved into the world's most respected and prudent fiduciary. According to Ralph Schlosstein, CEO of Evercore Partners, a New York-based investment bank: “BlackRock today is one of, if not the, most influential financial institutions in the world".[6]

On May 8, 2009, BlackRock was brought in as a dominant player to help the US government evaluate and price distressed assets. The Federal Reserve and the Treasury subsequently awarded BlackRock a $130 billion contract to manage the Federal government distressed assets.[7]

History

In 1988, Larry Fink and Robert S. Kapito left First Boston to found a company that would provide clients with asset management services from a risk management perspective. Initially, BlackRock was under the umbrella of The Blackstone Group and was called Blackstone Financial Management.

Fink joined Blackstone in 1988 as a partner, along with Kapito, Ralph Schlosstein, Bennett Golub, Barbara Novick, Susan Wagner, Keith Anderson and Hugh Frater. Before joining Blackstone, Fink, Kapito, Golub and Novick worked together at First Boston. As Managing Director at First Boston, Fink and his team pioneered the mortgage-backed securities market in the United States.

Blackstone Financial Management changed its name to BlackRock Financial Management a few years later to mitigate potential confusion with other Blackstone Group affiliates and to reduce the need for certain corporate governance restrictions that had been placed on it by The Blackstone Group.

The BlackRock team spun out of Blackstone and became an independent financial services firm. Fink cut a deal with the PNC Financial Services Group when they purchased 70% of BlackRock. Subsequently, PNC contributed a number of its other asset management subsidiaries into BlackRock which then consolidated the various entities into an integrated asset management firm. In 1999, with $165 billion in assets under management, the firm went public although PNC remained its dominant shareholder.

On June 17, 2002,  BlackRock Virginia Municipal Bond Trust declared the Trusts' first monthly dividends, payable on July 1, 2002, for shareholders of record as of June 26, 2002. .[8]

On Aug 27, 2004, BlackRock Inc agreed to acquire SSRM Holdings Inc from MetLife Inc for $375 million in cash and stock.[9]

BlackRock grew organically, through lift-outs[10] and their first acquisition was on January 28, 2005 when they purchased State Street Research Management, a mutual-fund business that had previously been owned by MetLife. This acquisition added a sizable equity business to BlackRock's funds. On September 29, 2006, BlackRock completed its merger with Merrill Lynch Investment Managers (MLIM), halving PNC's ownership and giving Merrill Lynch a 49.5-percent stake in the company. On October 1, 2007, BlackRock acquired the fund-of-funds business of Quellos Capital Management.[11] On April 30, 2009, BlackRock hired 43 employees from R3 Capital Management, LLC and took control of the $1.5 billion fund.

BlackRock Financial Management Inc. has been retained by the New York Fed to manage and eventually liquidate the assets held in a newly formed Delaware limited liability company (LLC) to fund the purchase of residential mortgage-backed securities (RMBS) from the securities lending portfolio of several regulated U.S. insurance subsidiaries of AIG.[12]

In December 2009, the company acquired Barclays Global Investors (BGI), giving it control of the iShares system. The division formerly branded BGI is headquartered in San Francisco, and also has research and portfolio management teams in London, Sydney, Tokyo, Toronto and other cities, as well as client service offices in several additional major financial centers in North America, Europe and Asia.

After the close of trading, on Friday, April 1, 2011, BlackRock (NYSE:BLK) replaced Genzyme (NASDAQ:GENZ) on the S&P 500 index.[13]

In October 2012, BlackRock bought a stake in the Moscow Exchange (MICEX-RTS) from Russia's state-backed private equity fund ahead of its expected IPO.[14]

Barclays Global Investors

BGI began as units of Wells Fargo Nikko and Barclays Bank which merged in 1996. Later, it went on to help pioneer the exchange-traded fund business (through its iShares brand), which is a security that can be traded at any time, and whose value is based on the value of a basket of stocks, bonds or commodities. ETFs can give tax advantages and intraday trading mechanical benefits that other products such as mutual funds do not.

BGI's active fund management accounted for 50% of the firm's revenue in 2006 until 2008. The passively managed iShares arm, in contrast, performed extremely well, accounting for about 45% of the revenue of the firm in 2008. At the end of 2008, the iShares division, with more than $290 billion in assets, accounted for about half the U.S. ETF industry. Global Exchange Traded Funds assets hit an all-time high of $1tln ($1,032bln) at the end of December 2009, 45.2% above the $710.9bln at the end of 2008.[15]

Under a 45-day "go shop" clause from April 2009, a bid by BlackRock was announced on June 11, 2009[16] for the whole of BGI, in a mixed cash-stock deal worth around $13.5 billion (37.8 million shares of common stock and $6.6 billion in cash).[17]

Key people

  • Laurence D. Fink — Chairman & CEO
  • Robert S. Kapito — President
  • Kendrick R. Wilson, III — Vice Chairman
  • Philipp Hildebrand[18] — Vice Chairman
  • Charles Hallac — Senior Managing Director, Chief Operating Officer
  • Gary Shedlin — Senior Managing Director, Chief Financial Officer
  • Bennett W. Golub — Senior Managing Director, Chief Risk Officer
  • Robert W. Fairbairn — Senior Managing Director, Head of Retail and iShares Businesses
  • J. Richard Kushel — Senior Managing Director, Head of Portfolio Management
  • Peter Fisher — Senior Managing Director, Global Executive Committee
  • Rick Rieder — Chief Investment Officer, Fixed Income
  • Rob Goldstein — Senior Managing Director, Head of Institutional Client Businesses and BlackRock Solutions
  • Mark McCombe — Chairman of Asia Pacific Region[19]
  • Linda Gosden Robinson - Senior Managing Director and Global Head of Marketing and Communications

Notes

External links

  • Official BlackRock website
  • BlackRock SEC Filings
  • Official US iShares site
  • Official UK iShares site
  • Official Canadian iShares site
  • BlackRock US Cash Management website
  • BlackRock EMEA Cash Management website
  • Fortune Magazine Article: Can this man save Wall Street
  • BlackRock's Analytics Pay Off in More Ways Than One
  • Fink Builds BlackRock Powerhouse without Goldman Sachs Backlash
  • Larry Fink’s $12 Trillion Shadow
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