BlackRock
Encyclopedia
BlackRock, Inc. is an American multinational
investment management
corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan
, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions. The company acquired Barclays Global Investors in December 2009, solidifying BlackRock's position as the largest investment manager
in the world.
Founded in 1988, initially offering fixed income products, 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.”
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, São Paulo, Tokyo, Hong Kong, Taipei, Beijing, Sydney, Dubai, and various other cities. BlackRock has approximately 10,200 employees, including more than 700 investment professionals worldwide.
In 1988, Laurence Fink or as he is called, 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 called Blackstone Financial Management.
Larry Fink
, joined Blackstone in 1988 as a partner, along with Ralph Schlosstein, former White House aide in the Carter administration, Robert S. Kapito
, Bennett Golub, Barbara Novick, Sue 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. Larry Fink holds an MBA from the UCLA Anderson School of Management.
The original founders of BlackRock were Laurence Fink, Ralph Schlosstein, Robert S. Kapito
, Susan Wagner, Bennett Golub, Barbara Novick, Keith Anderson, and Hugh Frater. Blackstone Financial Management wound up changing its name to BlackRock Financial Management a few years later to reduce potential confusion with other Blackstone Group affiliates as well as to reduce the need for certain corporate governance restrictions that had been placed on it by The Blackstone Group.
In 1992, Steve Schwarzman thought BlackRock had peaked at $100 billion in assets under management
. He wanted to cash out.
The BlackRock team spun out of Blackstone and became an independent financial services firm. Larry 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 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. 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
.
BlackRock fund is currently the 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, 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
.
After the close of trading, on Friday, April 1, 2011 BlackRock (NYSE:BLK) replaced Genzyme
(NASDAQ:GENZ) on the S&P 500 index.
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 fund
s 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. 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.
In April 2009, under a 45-day "go shop" clause, a bid by BlackRock was announced on June 11, 2009 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).
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
investment management
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan
Manhattan
Manhattan is the oldest and the most densely populated of the five boroughs of New York City. Located primarily on the island of Manhattan at the mouth of the Hudson River, the boundaries of the borough are identical to those of New York County, an original county of the state of New York...
, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions. The company acquired Barclays Global Investors in December 2009, solidifying BlackRock's position as the largest investment manager
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
in the world.
Founded in 1988, initially offering fixed income products, BlackRock has become a financial powerhouse while remaining out of the public eye. According to Ralph Schlosstein, CEO of Evercore Partners
Evercore Partners
Evercore Partners is an investment bank located in New York City. Evercore also has an investment management business through which the Company manages private equity and venture capital funds for institutional investors...
, a NY-based investment bank: “BlackRock today is one of, if not the, most influential financial institutions in the world.”
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, São Paulo, Tokyo, Hong Kong, Taipei, Beijing, Sydney, Dubai, and various other cities. BlackRock has approximately 10,200 employees, including more than 700 investment professionals worldwide.
History
Laurence D. Fink
Laurence D. "Larry" Fink is the chairman and chief executive officer of BlackRock, an American multinational investment management corporation. BlackRock is the largest money-management firm in the world.-Early life and education:...
and Robert S. Kapito
Robert S. Kapito
-Early life and education:Kapito earned an MBA from Harvard Business School in Cambridge, Massachusetts in 1983 after completing a BS degree in Economics from the Wharton School of the University of Pennsylvania...
left First Boston
First Boston
First Boston Corporation was a New York-based, bulge bracket, investment bank, founded in 1932 and acquired by Credit Suisse in 1990. Together with its sister investment banks, it was referred to as CS First Boston after 1993 and part of Credit Suisse First Boston after 1996, the First Boston part...
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
Blackstone Group
The Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, real estate, and credit and marketable alternative investment strategies, as well as financial advisory services, such as mergers and acquisitions ,...
and called Blackstone Financial Management.
Larry Fink
Laurence D. Fink
Laurence D. "Larry" Fink is the chairman and chief executive officer of BlackRock, an American multinational investment management corporation. BlackRock is the largest money-management firm in the world.-Early life and education:...
, joined Blackstone in 1988 as a partner, along with Ralph Schlosstein, former White House aide in the Carter administration, Robert S. Kapito
Robert S. Kapito
-Early life and education:Kapito earned an MBA from Harvard Business School in Cambridge, Massachusetts in 1983 after completing a BS degree in Economics from the Wharton School of the University of Pennsylvania...
, Bennett Golub, Barbara Novick, Sue 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
First Boston
First Boston Corporation was a New York-based, bulge bracket, investment bank, founded in 1932 and acquired by Credit Suisse in 1990. Together with its sister investment banks, it was referred to as CS First Boston after 1993 and part of Credit Suisse First Boston after 1996, the First Boston part...
, Fink and his team pioneered the mortgage-backed securities
Mortgage-backed security
A mortgage-backed security is an asset-backed security that represents a claim on the cash flows from mortgage loans through a process known as securitization.-Securitization:...
market in the United States. Larry Fink holds an MBA from the UCLA Anderson School of Management.
The original founders of BlackRock were Laurence Fink, Ralph Schlosstein, Robert S. Kapito
Robert S. Kapito
-Early life and education:Kapito earned an MBA from Harvard Business School in Cambridge, Massachusetts in 1983 after completing a BS degree in Economics from the Wharton School of the University of Pennsylvania...
, Susan Wagner, Bennett Golub, Barbara Novick, Keith Anderson, and Hugh Frater. Blackstone Financial Management wound up changing its name to BlackRock Financial Management a few years later to reduce potential confusion with other Blackstone Group affiliates as well as to reduce the need for certain corporate governance restrictions that had been placed on it by The Blackstone Group.
In 1992, Steve Schwarzman thought BlackRock had peaked at $100 billion in assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
. He wanted to cash out.
The BlackRock team spun out of Blackstone and became an independent financial services firm. Larry 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 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
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
a 49.5-percent stake in the company. On October 1, 2007, BlackRock acquired the fund-of-funds business of Quellos Capital Management. 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
AIG
AIG is American International Group, a major American insurance corporation.AIG may also refer to:* And-inverter graph, a concept in computer theory* Answers in Genesis, a creationist organization in the U.S.* Arta Industrial Group in Iran...
.
BlackRock fund is currently the 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
IShares
iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
system. The division formerly branded BGI is headquartered in San Francisco, and also has research and portfolio management teams in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
, Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
, Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
, and other cities, as well as client service offices in several additional major financial centres in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
, and Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
.
After the close of trading, on Friday, April 1, 2011 BlackRock (NYSE:BLK) replaced Genzyme
Genzyme
Genzyme Corporation is a fully owned subsidiary of Sanofi-Aventis. Before its acquisition, Genzyme was an American biotechnology company based in Cambridge, Massachusetts. In 2010, Genzyme was the world’s third-largest biotechnology company, employing more than 11,000 people around the world...
(NASDAQ:GENZ) on the S&P 500 index.
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 fundExchange-traded fund
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE...
business (through its iShares
IShares
iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
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 fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
s do not. Since the economics of indexed fund management are heavily influenced by economies of scale
Economies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
, 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. 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.
In April 2009, under a 45-day "go shop" clause, a bid by BlackRock was announced on June 11, 2009 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).
Key people
- Laurence D. FinkLaurence D. FinkLaurence D. "Larry" Fink is the chairman and chief executive officer of BlackRock, an American multinational investment management corporation. BlackRock is the largest money-management firm in the world.-Early life and education:...
— Chairman & CEO - Robert S. KapitoRobert S. Kapito-Early life and education:Kapito earned an MBA from Harvard Business School in Cambridge, Massachusetts in 1983 after completing a BS degree in Economics from the Wharton School of the University of Pennsylvania...
— President - Susan L. Wagner — Vice Chairman
- Barbara G. Novick — Vice Chairman
- Kendrick R. Wilson, III — Vice Chairman
- Charles S. Hallac — Senior Managing Director, Chief Operating Officer
- Ann Marie Petach — Senior Managing Director, Chief Financial Officer
- Bennett W. Golub, Ph.D. — Senior Managing Director, Chief Risk Officer
- Robert W. Fairbairn — Senior Managing Director, Head of Global Client Group
- 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
- Mark McCombe — Chairman of Asia Pacific Region
External links
- Official BlackRock website
- Official US iShares site
- Official UK iShares site
- Official Canadian iShares site
- BlackRock US Cash Management website
- BlackRock EMEA Cash Management website
- Money Management Letter Article - BlackRock builds their team through a lift-out with Nucci Consulting Group
- 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