BlackRock

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
Industry	Investment management
Founded	1988
Headquarters	Park Avenue Plaza Manhattan, New York City, New York, United States
Area served	Worldwide
Key people	Laurence Fink (Chairman & CEO) Robert Kapito (President)
Products	Asset management
Revenue	US$ 8.61 billion (2010)[1]
Net income	US$ 2.06 billion (2010)[1]
AUM	US$ 3.345 trillion
Total assets	US$ 178 billion (2009)[2]
Total equity	US$ 24.3 billion (2009)[2]
Employees	10,200 (2011)
Website	BlackRock.com

BlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager.^[3] BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions^{[citation needed]}. The company acquired Barclays Global Investors in December 2009, solidifying BlackRock's position as the largest investment manager in the world.^[4]

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.”^[5]

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.^[6] BlackRock has approximately 10,200 employees, including more than 700 investment professionals worldwide.

History

New York Headquarters

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 ^[7] 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.^[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 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,^[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]

After the close of trading, on Friday, April 1, 2011 BlackRock (NYSE:BLK) replaced Genzyme (NASDAQ:GENZ) on the S&P 500 index.^[12]

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. 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.^[13]

In April 2009, under a 45-day "go shop" clause, a bid by BlackRock was announced on June 11, 2009^[14] 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).^[15]

Key people

• Laurence D. Fink — Chairman & CEO
• Robert S. Kapito — President
• Susan L. Wagner^[16] — 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^[17]

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. ^ Tully, Shawn (August 12, 2009). "Inside the trillionaires' club". CNN. http://money.cnn.com/2009/08/12/news/companies/blackrock_trillionaires_club.fortune/index.htm. 
5. ^ http://www.bloomberg.com/news/2010-12-09/larry-fink-builds-blackrock-into-powerhouse-without-goldman-sachs-backlash.html.
6. ^ "Locations". http://www2.blackrock.com/global/home/Careers/BusinessLocations/index.htm. 
7. ^ lift-outs
8. ^ "BlackRock to Acquire Fund of Funds Business from Quellos Group, LLC". 2007-06-26. http://www2.blackrock.com/content/groups/global/documents/literature/qpr_062507_bb.pdf. 
9. ^ "New York Fed". http://www.newyorkfed.org/markets/rmbs_terms.html. 
10. ^ BGI site "About us" page, as of December 2007
11. ^ BGI site "Locations" page, as of August 2006
12. ^ Bloomburg Businessweek ", The Associated Press as of March 29, 2011
13. ^ Opalesque (14 January 2010). "BlackRock's global ETF's hit an all time high of $1tln". http://www.opalesque.com/56714/blackrock/Assets_Global_ETF_assets715.html. 
14. ^ "Blackrock to acquire stake in Barclays unit, NYT, June 12, 2009". The New York Times. June 12, 2009. http://www.nytimes.com/2009/06/12/business/global/12barclays.html?partner=rss&emc=rss. Retrieved April 26, 2010. 
15. ^ "The Blackrock acquisition of BGI - The deal structure". http://wsj.dealogic.com/Blackrock-BGI-628022.htm. 
16. ^ "Most Powerful Women". CNN. September 15, 2009. http://money.cnn.com/galleries/2009/fortune/0909/gallery.most_powerful_women.fortune/33.html. 
17. ^ http://www.blackrock.com.hk/content/groups/hongkongsite/documents/literature/1111148300.pdf

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

• hires Denholm