BlackRock

THE SCOOP

One of the world's largest

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.

BlackRock's roots

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 quarter alone.

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.

Merging with Merrill, buying Barclays

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.