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BlackRock

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For other uses, see Black Rock (disambiguation).
BlackRock Inc
Company typePublic (NYSE: BLK)
ISINUS09247X1019 Edit this on Wikidata
IndustryInvestment management
Founded1988
FounderLarry Fink Edit this on Wikidata
HeadquartersNew York, USA
Key people
Laurence D. Fink, CEO
ProductsAsset management
RevenueIncrease US$8.61 Billion (2010)[1]
Increase US$2.06 Billion (2010)[1]
AUM$3.561 trillion
Total assetsIncrease US$178 Billion (FY 2009)[2]
Total equityIncrease US$24.3 Billion (FY 2009)[2]
Number of employees
8,900 (2010)
Websitewww.blackrock.com

BlackRock is the largest global investment management firm headquartered in New York City. It is one of the most prominent financial institutions in the US.[3] The company acquired Barclays Global Investors in December 2009 under the BlackRock name, making it the largest money manager in the world.[4]

As of December 31, 2010, BlackRock’s assets under management total $3.56 trillion across equity, fixed income, alternative investments, real estate, and advisory strategies. Through BlackRock Solutions, it offers risk management, strategic advisory, and enterprise investment system services to a broad base of clients with portfolios totaling approximately $9 trillion[5].

Founded in 1988 as a bond-trading shop, BlackRock has become a financial powerhouse while remaining out of the public eye. According to Ralph Schlosstein, CEO of Evercore Partners, a NY-based investment bank: “BlackRock today is one of, if not the, most influential financial institutions in the world.”[6]

BlackRock serves clients in 60 countries, maintaining a major presence in North America, Europe, Asia-Pacific, and the Middle East. It has offices in San Francisco, Chicago, Los Angeles, Dallas, Princeton, Wilmington, London, Zurich, Paris, Frankfurt, Sao Paulo, Tokyo, Beijing, Sydney, Dubai, and various other cities.[7] Blackrock has approximately 8,400 employees, including more than 700 investment professionals worldwide.


History

New York Headquarters

BlackRock was founded as BlackStone Financial Management within the private equity firm Blackstone Group in 1988. Larry Fink, BlackRock’s founder and CEO, had joined Blackstone in 1988 as a partner, along with Ralph Schlosstein, former White House aide in the Carter administration, Robert Kapito, and Sue Wagner. Before joining Blackstone, Fink was a managing director at First Boston, where he pioneered the mortgage-backed securities market in the United States. In 1992 Fink, Schlosstein and the others separated from the Blackstone Group, under the name BlackRock and aggressively re-invented it as an independent asset-management company. In 1995, PNC Financial Services Group purchased BlackRock and in 1999, assets under management had grown to $165 billion and the firm decided to go public.

Much of BlackRock's recent growth has been through its acquisitions. On January 28, 2005, BlackRock 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, which had previously comprised mostly fixed-income securities. 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. [8] 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.[9]

BlackRock fund is currently largest shareholder of Apple Inc., owning 5.5%, valued at more than $15 billion.

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[10], 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 centres in Europe, North America, and Asia [11].

Barclays Global Investors

Barclays Global Investors: San Francisco Office

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. Since the economics of indexed fund management are heavily influenced by economies of scale, Barclays grew to be the largest asset managing company in the world.

Since 2000, BGI's active fund management business grew significantly, to the point where it accounted for approximately 50% of the firm's revenue in 2006. However, like other actively managed hedge funds, it was badly affected in the quant fund meltdown in 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. BlackRock's 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[12].

In April 2009, under a 45-day "go shop" clause, a bid by BlackRock was announced on June 11, 2009[13] 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)[14].

Key people

  • [[Laurence D. Fink]] — Chairman & CEO
  • [[Robert S. Kapito]] — President
  • Susan L. Wagner - Vice Chairman
  • Charles S. Hallac - Senior Managing Director, Chief Operating Officer
  • Ann Marie Petach - Senior Managing Director, Chief Financial Officer
  • Robert W. Fairbairn - Senior Managing Director, Head of Global Client Group
  • Blake Grossman - Vice Chairman, Head of Scientific Equities
  • J. Richard Kushel - Senior Managing Director, Head of Portfolio Management
  • Bennett W. Golub, Ph.D. - Senior Managing Director, Chief Risk Officer
  • Rick Rieder - Chief Investment Officer, Fixed Income
  • J. Richard Kushel - Senior Managing Director - Head of Portfolio Management]

Notes

  1. ^ a b BlackRock (BLK) annual SEC income statement filing via Wikinvest
  2. ^ a b BlackRock (BLK) annual SEC balance sheet filing via Wikinvest
  3. ^ Larry Fink’s $12 Trillion Shadow Suzanna Andrews. Vanity Fair. April 2010
  4. ^ http://money.cnn.com/2009/08/12/news/companies/blackrock_trillionaires_club.fortune/index.htm.
  5. ^ "BlackRock About Us".
  6. ^ http://www.bloomberg.com/news/2010-12-09/larry-fink-builds-blackrock-into-powerhouse-without-goldman-sachs-backlash.html.
  7. ^ "Locations".
  8. ^ "BlackRock to Acquire Fund of Funds Business from Quellos Group, LLC" (PDF). 2007-06-26.
  9. ^ "New York Fed".
  10. ^ BGI site "About us" page, as of December 2007
  11. ^ BGI site "Locations" page, as of August 2006
  12. ^ Opalesque (14 January 2010). "BlackRock's global ETF's hit an all time high of $1tln".
  13. ^ "Blackrock to acquire stake in Barclays unit, NYT, June 12, 2009". The New York Times. June 12, 2009. Retrieved April 26, 2010.
  14. ^ "The Blackrock acquisition of BGI - The deal structure".

References


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