One of the world's
With more than $3.7 billion in assets under management, BlackRock
is one of the largest-and most highly respected-asset management
firms in the word. Headquartered in New York, the firm
employs approximately 9,700 people in 24 countries, and serves
institutional investors as well as retail investors. It
provides its clients with a wide range of equity, fixed income,
multi-asset class, alternative asset and cash management
products. In addition, it offers risk management, advisory,
outsourcing and transitional management services. For
its fiscal year 2009, the firm booked $4.7 billion in revenues and
$875 million in net income.
The BlackRock tale began in 1988 when the firm's current chairman
and CEO, Larry Fink, left his post as a bond trader at Credit
Suisse First Boston. While at First Boston, Fink and his team
helped create a new mortgage-backed security market, worth an
estimated $4 trillion today. His investment group at the bank
consistently pulled in more than $100 million a year until 1986,
when interest rates dropped and the group lost that much in one
Fink licked his wounds and left First Boston in 1988 to join The
Blackstone Group as a partner, but the lessons he learned as a bond
trader stayed with him. "What I learned [then] is that you
have to understand your risk in good times and bad times & and
that the pain of losing money is far greater than the glory of
making money," Fink said in a February 2006 interview with The New York Times.
At The Blackstone Group, Fink joined Ralph
Schlosstein, a former White House aide during the Carter
administration, to construct a new asset management business.
Within three years, Blackstone's asset management division, later
dubbed BlackRock, had $9 billion under management from big-name
clients, including Chrysler and GE. When the bond market went
bust two years later, Fink feuded with his fellow Blackstone
partners over strategic moves. He and Schlosstein took the
group solo. In 1995, PNC bought BlackRock for $240 million.
By 1999, when assets under management had reached $165 billion, the
firm went public.
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Merging with Merrill, buying
In October 2006, BlackRock completed a $9.8 billion merger with
Merrill Lynch Investment Managers (the biggest-ever fund management
deal), BlackRock became one of the world's largest money managers.
Its net income tripled and its asset base almost doubled after the
acquisition to $1.3 trillion in assets. Today, the firm has
more than 5,950 employees in 35 offices across 19 countries.
Merrill Lynch holds a 49 percent stake in the company, while
Pittsburgh-based PNC Financial Services Group retains an interest
of about 34 percent. Public shareholders and BlackRock
employees own the remaining 17 percent of the company.
In June 2009, BlackRock went even larger, announcing that it would
acquire Barclays Global Investors from Barclays PLC for $13.5
billion, a transaction creating an entity with $3 trillion in
assets known as BlackRock Global Investors. The deal was one
of the biggest deals the money management industry has seen.
The deal closed in December 2009.