BlackRock

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Not to be confused with Blackstone Group, a private equity and alternative investments firm. For other uses, see Black Rock (disambiguation).
BlackRock, Inc.
Type Public
Traded as NYSE: BLK
S&P 500 Component
Industry Investment management
Founded 1988
Headquarters New York City, New York, The USA
Area served Worldwide
Key people Laurence Fink
(Chairman & CEO)
Robert Kapito (President)
Products Asset management
Revenue Increase US$ 9.08 billion (2011)[1]
Net income Increase US$ 2.239 billion (2011)[2]
AUM Increase US$ 3.792 trillion (2012)[3]
Total assets Increase US$ 178.4 billion (2010)
Total equity Increase US$ 24.3 billion (2009)
Employees 10,100 (2011)[1]
Website BlackRock.com

BlackRock, Inc. is a 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, 2012, BlackRock has $3.67 trillion in assets under management.[5] Street Authority reported that, "If the company were a country, then its assets under management would put it at the fourth largest in terms of gross domestic product, higher than Germany or France."[6][7]

Founded in 1988, initially offering fixed income products, BlackRock has since evolved into a prominent financial vehicle. 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.”[8]

Contents

History [edit]

BlackRock headquarters in Midtown Manhattan, New York City.

In 1988, Larry Fink and Robert S. Kapito left First Boston to find 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.

BlackRock grew organically, through lift-outs [9] 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.[10] 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. [11]

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.[12]

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.[13]

Barclays Global Investors [edit]

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.[14]

Under a 45-day "go shop" clause from April 2009, a bid by BlackRock was announced on June 11, 2009[15] 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).[16]

Key people [edit]

  • Laurence D. Fink — Chairman & CEO
  • Robert S. Kapito — President
  • Susan L. Wagner[17] — Vice Chairman
  • Linda Gosden Robinson - Senior Managing Director and Global Head of Marketing and Communications
  • Kendrick R. Wilson, III — Vice Chairman
  • Philipp Hildebrand[18] — Vice Chairman
  • Charles S. Hallac — Senior Managing Director, Chief Operating Officer
  • Ann Marie Petach — 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, Head of Fixed Income Portfolio Management
  • 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]

Notes [edit]

  1. ^ a b "BlackRock Reports Fourth Quarter Earnings". January 19, 2011.  BlackRock, Inc. Retrieved January 23, 2012.
  2. ^ "BlackRock, Form 10-K, Annual Report, Filing Date Feb 28, 2012". secdatabase.com. Retrieved Feb 13, 2013. 
  3. ^ "BLK 2012 Q4". BlackRock. 
  4. ^ Andrews, Suzanna. Larry Fink’s $12 Trillion Shadow "Larry Fink’s $12 Trillion Shadow". Vanity Fair. Retrieved 2013-04-20. 
  5. ^ http://www2.blackrock.com/global/home/AboutUs/index.htm
  6. ^ "How to Profit from One of the Largest Insider Stock Purchases in a Decade". November 29, 2012. 
  7. ^ Tully, Shawn (August 12, 2009). "Inside the trillionaires' club". CNN. 
  8. ^ Kolhatkar, Sheelah (December 9, 2010). "Fink Builds BlackRock Powerhouse Without Goldman Sachs Backlash". Bloomberg. Retrieved April 20, 2013. 
  9. ^ http://www.moneymanagementletter.com/article.aspx?articleID=1337326
  10. ^ "BlackRock to Acquire Fund of Funds Business from Quellos Group, LLC". 2007-06-26.  BlackRock, Inc.
  11. ^ "AIG RMBS LLC Facility: Terms and Conditions".  Federal Reserve Bank of New York. Retrieved 2012-01-23.
  12. ^ "BlackRock to join S&P 500 index, replacing Genzyme". Bloomberg Businessweek. 2011-03-29.  Retrieved January 23, 2012.
  13. ^ Reuters (28 September 2012). "Deals of the day -- mergers and acquisitions". Reuters. 
  14. ^ Opalesque (14 January 2010). "BlackRock's global ETF's hit an all time high of $1tln". 
  15. ^ de La Merced, Michael (June 12, 2009). "Blackrock to acquire stake in Barclays unit, NYT, June 12, 2009". The New York Times. Retrieved April 26, 2010. 
  16. ^ "The Blackrock acquisition of Barclays Global Investors". WSJ Dealogic. 12 June 2009. 
  17. ^ "Most Powerful Women". CNN. September 15, 2009. 
  18. ^ "BLACKROCK NAMES PHILIPP HILDEBRAND VICE CHAIRMAN WITH RESPONSIBILITY FOR LARGE INSTITUTIONAL RELATIONSHIPS IN EMEA AND ASIA PACIFIC". June 13, 2012. 
  19. ^ "BlackRock Appoints Mark McCombe Chairman of Asia Pacific Region". September 9, 2011.  BlackRock, Inc. Retrieved January 23, 2012.

External links [edit]
Subsidaries
Services
Predecessor banks
Naming rights
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