BlackRock Inc.
| BlackRock Inc. | |
| |
| Founded | 1988 |
|---|---|
| Headquarters | Headquartered in New York. Serves clients in 70 cities across 30 countries |
| Key People | Laurence D. Fink, Chief Executive |
| Employees | 11,000+ |
| Products | Risk management and trade processing |
| Website | www.blackrock.com |
BlackRock Inc. is the world's largest asset management company. As of September 2022, BlackRock's assets under management totaled around 8.5 trillion U.S. dollars, across equity, fixed income, cash management, alternative investment and real estate strategies.[1] The company is the biggest provider of exchange-traded funds in the U.S. [2]
A publicly held corporation since 1999, BlackRock is independent in ownership and governance, with no single majority stockholder and a majority of independent directors.[3] After Bank of America Merrill Lynch divested its majority stake in 2011, the firm's shares have been widely held, with PNC Financial Services Group holding an interest of about 29 percent.
Since 2009, BlackRock has owned and operated iShares, one of the oldest and largest families of exchange traded funds.
History[edit]
BlackRock was founded in 1988 by former mortgage-bond trader Larry Fink as the Financial Management Group within the private equity firm Blackstone Group. The company changed its name to BlackRock in 1992. [4]
The company merged with PNC Financial Services Group in 1995.
BlackRock began selling its proprietary technology, called Aladdin, in 1999. The company made its Initial Public Offering on the New York Stock Exchange on October 1st of the same year, for $14 a share. By the end of that year, the firm had $165 billion in assets under management.[5]
In 2000, BlackRock founded BlackRock Solutions with Aladdin as the basis for the business, marking the company's beginning as a technology provider. It began offering risk management and trade processing tools to external clients under the BlackRock Solutions brand. The tools were designed to provide portfolio transparency and increased efficiency.
Blackrock merged in 2006 with Merrill Lynch Investment Managers (MLIM), taking a 49 percent stake in the firm.
In October of 2007, BlackRock acquired the fund of funds business of Quellos Group, LLC to form one integrated fund of funds platform.
The Federal Reserve Board of New York, chose the firm during the financial crisis of 2008-2009 to manage a $30 billion portfolio of Bear Stearns assets after the bank collapsed.[6]
In June 2009, the company agreed to acquire Barclays Global Investors, including exchange-traded funds platform iShares, from parent company Barclays Plc for $13.5 billion. The companies combined to create an asset management firm operating under the name BlackRock Global Investors with combined assets under management of over $2.7 trillion, according to BlackRock.[7] Barclays retained a 19.9 percent stake in the combined company.
In May 2011, BofA Merrill Lynch divested the last of its 49 percent stake in BlackRock by selling 13.6 million shares back to the company.
In April of 2012, Blackrock announced it would launch a trading platform in 2012 that would let the world's largest money manager and its peers bypass Wall Street and trade bonds directly with one another.[8]
In January 2014, BlackRock said it would end its practice of surveying Wall Street analysts for clues about their views on companies before those opinions are publicly issued. The company reached that decision as part of a settlement with Eric T. Schneiderman, the New York attorney general. BlackRock also agreed to pay $400,000 to cover the costs of the investigation into the practice.[9]
On May 14, 2014, BlackRock announced a partnership with Tradeweb focused on boosting trading, liquidity and risk management in the interest rate and derivatives markets for institutional investors. The alliance allows users of BlackRock’s Aladdin risk management system to access a range of interest rate markets, including US Treasury bonds, European, Japanese and Australian government bonds, US mortgage and agency debt, as well as interest rate swaps.[10]
In August of 2014 the European Central Bank appointed BlackRock to advise on a potential bond-buying scheme. The company's advisory arm, BlackRock Solutions, is to help the ECB design a program to buy asset-backed securities as part of a plan to ease credit conditions in the eurozone. BlackRock Solutions was appointed by the Greek central bank earlier in 2014 to examine its four big banks’ balance sheets; it also worked with the Central Bank of Ireland during the eurozone debt crisis.[11]
On April 20th, 2015 Blackrock Inc. settled with the SEC for $12 million over a conflict of interest case. The SEC said BlackRock failed to disclose that a fund manager, Daniel Rice, was running a family-owned oil and natural gas company that became the largest holding of a fund he ran for BlackRock. [12]
On August 28, 2015, BlackRock announced that it would acquire FutureAdvisor, a digital wealth management company.[13]
The company introduced sweeping changes to its actively managed equities funds in March of 2017, firing a number of prominent stockpicking fund managers and announcing plans to switch their funds to quantitative investment strategies. The move was in the wake of a shift in investors from active to lower cost passive funds.[14]
In August of 2018 BlackRock agreed to become one of ICE's development partners in a new exchange-traded fund platform, set to go live in 2019. The platform will be connected to BondPoint, TMC Bonds and ICE Credit Trade for fixed income execution protocols for various assets including municipals, corporates and treasuries.
In March of 2019, BlackRock Inc. entered into an exclusive agreement to buy the French software firm eFront, in a move to become a bigger provider of financial technology.[15]
On January 14, 2020, the company announced a $500 million divestiture from coal-related businesses in its actively managed funds in a move to address climate change. BlackRock also said it would add new funds that allow clients to avoid investments in companies that may be adding to climate change, doubling the number of ESG-related ETFs it offers to 150.[16]
On February 13, 2020, the Intercontinental Exchange announced it had integrated its ICE Bonds fixed-income trading platform with BlackRock’s Aladdin, offering access to ICE Bonds’ Portfolio Auction functionality, an automated execution protocol for portfolio trading.[17]
In June 2021, BlackRock received the first approval for a foreign asset manager to launch a wholly owned mutual fund business in China, from the China Securities Regulatory Commission.[18]
Products and Services[edit]
The company offers mutual funds, ETFs and closed-end funds in equities, fixed income, cash, commodities, real estate and other asset classes.[19]
In August 2022, BlackRock Inc. said it was partnering with Coinbase Global Inc. to make it easier for institutional investors to manage and trade Bitcoin. The partnership would enable top BlackRock clients to use its Aladdin investment management system to oversee their exposure to Bitcoin along with other portfolio assets such as stocks and bonds, and to facilitate financing and trading on Coinbase’s exchange.[20]
Key People[edit]
- Laurence D. Fink, Chairman and CEO [21]
- Robert S. Kapito, President
- Charles S. Hallac, Co-President
- Mark McCombe, Chairman of Asia Pacific
- James J. Charrington, Chairman of Europe, Middle East & Africa
References[edit]
- ↑ Total assets under management (AUM) of BlackRock from 2008 to 2nd quarter 2022. Statista.
- ↑ BlackRock to Cut iShares ETF Fees. Bloomberg.
- ↑ Bank of America Will Sell BlackRock Stake Back to Company for $2.5 Billion. Bloomberg.
- ↑ BlackRock to Buy Barclays Fund Unit for $13.5 Billion. Bloomberg.
- ↑ BlackRock History. BlackRock.
- ↑ Can Anyone Bury BlackRock?. Institutional Investor.
- ↑ BlackRock To Acquire Barclays Global Investors. Securities Industry News.
- ↑ BlackRock's Street Shortcut. WSJ.com.
- ↑ BlackRock Agrees to End Wall Street Analysis Previews. The New York Times.
- ↑ BlackRock signals bond trading shakeup. The Financial Times.
- ↑ ECB signs up BlackRock to advise on bond buying. The Financial Times.
- ↑ BlackRock to pay $12 mln in SEC conflict of interest case. Reuters.
- ↑ BlackRock Buys FutureAdvisor, Believes Technology could Reshape Financial Advisory Market. Franchise Herald.
- ↑ BlackRock cuts ranks of stockpicking fund managers. The Financial Times.
- ↑ BlackRock Enters Exclusive Agreement to Buy French Software Provider eFront. The Wall Street Journal.
- ↑ BlackRock to sell $500 million in coal investments in climate change push. CBS News.
- ↑ Ice Bonds Completes Integration With Blackrock’s Aladdin to Offer Fixed Income Portfolio Auction Functionality to Investment Managers. ICE press release.
- ↑ BlackRock wins Chinese approval for mutual fund business. The Financial Times.
- ↑ Investment Funds. BlackRock Inc..
- ↑ BlackRock Teams Up With Coinbase in Crypto Market Expansion. Bloomberg.
- ↑ BlackRock to Acquire Stake in Barclays Unit. The New York Times.