Worldwide assets managed in iShares ETFs totaled $1.92 trillion as of March 31, up 287% from $495.5 billion when BGI was acquired on Dec. ISHARE BARCLAY DRIVEROf those passive assets, the most important driver of BlackRock's growth in passive management came from the addition of BGI's iShares family of exchange-traded funds. Falk, managing partner at manager consultant Focus Consulting Group Inc., Long Grove, Ill., in an interview. "The acquisition of BGI was a brilliant coup for BlackRock and enabled the firm to carve out its position in the oligarchy of passive managers alongside Vanguard Group and State Street Global Advisors," said Michael S. BlackRock managed very little in passive strategies prior to the acquisition of BGI, BlackRock spokeswoman Melissa Garville said. BlackRock managed $4.15 trillion of worldwide assets in passive strategies as of June 30, 2018, the most recent data showed. Fink said, stressing that BlackRock's theory that a firm could combine alpha and beta production turned out to be "a correct assumption."īlackRock has owned the top spot on Pensions & Investments' ranking of index managers beginning in 2010. "I think over the last 10 years, we disproved the naysayers," Mr. Fink said, and went on the lookout for an opportunity to acquire a large passive manager rather than try to build a large-scale practice organically. In 2007, BlackRock studied the role of ETFs in investor portfolios, Mr. Fink said the successful integration of those firms gave him and the executive committee the confidence to go through with the BGI deal. However, after the acquisitions of State Street Research & Management in 2005 and Merrill Lynch Investment Managers in 2006, Mr. Fink said he "wasn't quite confident enough" to go through with the deal, noting "I didn't think BlackRock had the DNA to make an acquisition" at the time. In fact, he said that after "very in-depth conversations" with Barclays in 2004 about acquiring BGI, BlackRock "walked away" from the deal.Īt that time, BGI would have been BlackRock's first acquisition since its founding in 1988 and Mr. Fink said BlackRock already had a "very strong" relationship with BGI prior to deal negotiations in 2009. ISHARE BARCLAY FULLFink said, but noted that the firm also needed to be able to offer institutional and other investors a full spectrum of investment strategies, including passive and quantitative approaches. BlackRock was able to offer active products and risk technology with our Aladdin systems," Mr. "Clients were looking for complete solutions. Fink said the "foundational context" of BlackRock's acquisition of BGI was to address client demand for outcome-oriented portfolio strategies. It also demonstrated why scale is becoming essential for asset management firms' survival in a turbulent environment," said Daniel Sondhelm, CEO of Sondhelm Partners, Alexandria, Va., a firm that advises money managers on marketing and distribution strategies, in an email. The BlackRock-BGI deal was "a game changer because it showed the industry what real scale can achieve with the successful merging of active and passive management under one roof. And my answer to that nonsense was 'Why not? Our clients use both,'" Mr. The BGI acquisition gave BlackRock "a unique platform that no other firm had ever had because at that time there was a belief that the cultures of active and passive managers were so diametrically different that you could never have a firm have both. 1, 2009 to March 31.īlackRock struck the deal with Barclays to broaden the firm's investment capability with passive and quantitative investment strategies, particularly exchange-traded funds, Chairman and CEO Laurence D. Worldwide assets under management have since increased 98.2% to $6.52 trillion from Dec. 1, 2009, BlackRock more than doubled its worldwide assets under management to about $3.29 trillion from $1.44 trillion and became the world's largest money manager, a status it has retained. In a deal that rocked the global investment industry in the early aftermath of the great financial crisis, New York-based BlackRock agreed to pay $13.5 billion to acquire the investment management business of London-based Barclays. Ten years ago today, BlackRock took a giant step toward becoming the world's largest money manager, announcing it would acquire Barclays Global Investors.
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