BlackRock

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Not to be confused with Blackstone Group, a private equity and alternative investment firm. For other uses, see Black Rock.
BlackRock, Inc.
Type Public
Traded as NYSEBLK
S&P 500 Component
Industry Investment management
Founded 1988
Headquarters 40 East 52nd Street
New York, New York, USA
Area served Worldwide
Key people Laurence Fink (Chairman & CEO)
Robert Kapito (Co-President)
Charles Hallac (Co-President)
Products Asset management
Revenue Increase US$ 10.2 billion (2013)[1]
Net income Increase US$ 2.932 billion (2013)
AUM Increase US$ 4.59 trillion (2014)[2]
Total assets Increase US$ 219,873 million (2013)[3]
Total equity Increase US$ 26,460 million (2013)
Employees 11,500[2]
Website BlackRock.com

BlackRock, Inc. is an American multinational investment management corporation based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager with over $4.59 trillion in assets under management.[2]

BlackRock is independently managed, with no single majority stockholder; stock is owned by institutional and individual investors, including BlackRock employees.

History[edit]

Origins[edit]

BlackRock was founded in 1988 by eight people including Larry Fink, Robert S. Kapito, Susan Wagner, Barbara Novick, Ben Golub, Hugh Frater, Ralph Schlosstein, and Keith Anderson to provide institutional clients with asset management services from a risk management perspective.

Fink, Kapito, Golub and Novick had worked together at First Boston, where Fink and his team were pioneers in the mortgage-backed securities market in the United States. During Fink's tenure, he had lost $100 Million as head of First Boston. That was the motivation to develop the world's greatest risk management and fiduciary.

Initially, Fink sought funding (for initial operating capital) from Pete Peterson of the The Blackstone Group L.P. who believed in Fink's vision of a firm devoted to risk management. Peterson called it Blackstone Financial Management.

In 1992, due to internal confusion, the decision was made to change their name from Blackstone Financial Management to BlackRock. In 1995, Schwarzman and Fink had an internal dispute over equity. Fink wanted to share equity with his employees. Schwarzman did not. They agreed to part ways, so the BlackRock partners, (Sue Wagner) orchestrated a deal with PNC Financial.

In 1995, BlackRock closed the deal with PNC Financial Services Group, while continuing to be managed independently. In 1998, PNC’s equity, liquidity, and mutual fund activities were merged into BlackRock. BlackRock went public in 1999 at $14 a share.[4]

1999–2009[edit]

BlackRock grew both organically [5] and by acquisition. In 2004, BlackRock acquired SSRM Holdings, Inc. from MetLife for $375 million in cash and stock.[6] Another acquisition from MetLife was the mutual-fund business State Street Research Management, in January 2005. In September 2006, BlackRock merged with Merrill Lynch Investment Managers (MLIM), halving PNC's ownership and giving Merrill Lynch a 49.5% stake in the company. In October 2007, BlackRock acquired the fund-of-funds business of Quellos Capital Management.[7] In April 2009, BlackRock hired 43 employees from R3 Capital Management, LLC and took control of the $1.5 billion fund.

The U.S. government contracted with BlackRock to help clean up after the financial meltdown of 2008. According to Vanity Fair, the financial establishment in Washington and on Wall Street believed BlackRock was the best choice for the job.[8]

In December 2009, the company acquired Barclays Global Investors (BGI) from Barclays. BGI was headquartered in San Francisco, with research and portfolio management teams in London, Sydney, Tokyo, Toronto, and other cities. BlackRock also acquired BGI's iShares funds.

2010 onwards[edit]

In 2010, Ralph Schlosstein, the CEO of Evercore Partners and a BlackRock founder, called BlackRock "the most influential financial institution in the world".[9]

On 1 April 2011, BlackRock (NYSE:BLK) replaced Genzyme (NASDAQ:GENZ) on the S&P 500 index.[10]

BlackRock Solutions[edit]

BlackRock Solutions, the risk management division of BlackRock, Inc., was retained by the U. S. Treasury Department in May, 2009 [11] to manage the toxic mortgage assets [i.e. to analyze, unwind, and price] that were owned by Bear Stearns Co, AIG, Inc., Freddie Mac, Morgan Stanley and other financial firms that were affected in the 2008 financial crisis.

In 2000, BlackRock launched BlackRock Solutions which grew from the Aladdin System (which is the enterprise investment system), Green Package (which is the Risk Reporting Service) PAG (portfolio analytics) and AnSer (which is the interactive analytics). BlackRock Solutions (BRS) serves two roles within BlackRock.

First, BlackRock Solutions is the in-house investment analytics and “process engineering” department for BlackRock which works with their portfolio management teams, risk and quantitative analysis, business operations and every other part of the firm that touches the investment process. Secondly, BlackRock Solutions (BRS) and the three primary division which include: risk management investment platform solutions, FMA, client solutions are services that offered to institutional clients. As of 2013, the platform had nearly 2,000 employees.[12] The major differential between BlackRock and every other asset manager is risk management is not separate. Risk management is the foundation and cornerstone of their entire platform.[12] Aladdin keeps track of 30,000 investment portfolios, including BlackRock's own along with those of competitors, banks, pension funds and insurers. According to The Economist, the platform monitors almost 7 percent of the world’s $225 trillion of financial assets.[12]

Organization[edit]

BlackRock is a global firm with 21 investment centers, 70 offices in 30 countries and clients in 100 countries.[13]

Key people[edit]

  • Laurence D. Fink - Founder, Chairman & CEO
  • Robert S. Kapito - Founder & Co-President
  • Charles Hallac - Co-President
  • Susan Wagner – Founder, member of the Board of Directors
  • Kendrick R. Wilson, III - Vice Chairman
  • Barbara Novick – Founder, Vice Chairman
  • Philipp Hildebrand - Vice Chairman
  • Robert Goldstein - Senior Managing Director, Chief Operating Officer
  • Gary Shedlin - Senior Managing Director, Chief Financial Officer
  • Bennett W. Golub - Founder, Senior Managing Director, Chief Risk Officer

Regulation[edit]

Jonathan Paul Burrows, a managing director in London, was banned by the British Financial Conduct Authority for "not being a fit and proper" person when it emerged in December 2014 that he paid £43,000 to avoid prosecution for dodging train fares. Blackrock said: "Jonathan Burrows left BlackRock earlier this year. What he admitted to the FCA is totally contrary to our values and principles."[14]

Notes[edit]

  1. ^ "BlackRock Reports Quarterly EPS of $4.86 or $4.92 as adjusted". 
  2. ^ a b c " "BlackRock Results Top Expectations". July 16, 2014. Retrieved July 16, 2014. 
  3. ^ http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjIyOTI4fENoaWxkSUQ9LTF8VHlwZT0z&t=1
  4. ^ "Corporate History". Retrieved 2014-03-22. 
  5. ^ "An Amazing Woman". http://www.ouvriersbtp.fr/. 2008-07-22. Retrieved 2008-07-22. 
  6. ^ "BlackRock Acquiring State Street Research from MetLife". 
  7. ^ "BlackRock to Acquire Fund of Funds Business from Quellos Group, LLC". 2007-06-26.  BlackRock, Inc.
  8. ^ Andrews, Suzanna. Larry Fink’s $12 Trillion Shadow, Vanity Fair, April 2010: "There is little doubt among the financial establishment in Washington and on Wall Street that BlackRock was the best choice to handle the government’s problems."
  9. ^ Kolhatkar, Sheelah (December 9, 2010). "Fink Builds BlackRock Powerhouse Without Goldman Sachs Backlash". Bloomberg. Retrieved April 20, 2013. 
  10. ^ "BlackRock to join S&P 500 index, replacing Genzyme". Bloomberg Businessweek. 2011-03-29.  Retrieved January 23, 2012.
  11. ^ Fink, Larry (2010-12-09). "Fink Builds BlackRock Powerhouse Without Goldman Sachs Backlash". Bloomberg (Bloomberg, LP). Retrieved 2014-10-16. 
  12. ^ a b c Briefing: BlackRock - The Monolith And The Markets, The Economist, December 7, 2013, pp. 24-26.
  13. ^ url=http://www.blackrock.com/corporate/en-us/about-us
  14. ^ "FCA Life Ban For Fare-Dodging Jonathan Burrows". Sky News. 15 December 2014. Retrieved 15 December 2014. 

External links[edit]