Daily Management Review

BlackRock’s Fink Forecasts A ‘Wave’ Of Mergers & Acquisition Taking Place In Asset Management Industry


04/21/2017


In the beginning, BlackRock has plans of dealing in small consolidations as the drive of M&A is likely to spread industry wide.



The C.E.O of BlackRock Inc., Larry Fink, is in charge of the largest asset management system in the world, whereby Fink came up with a waving forecast of “mergers and acquisitions in asset management”. However, he also stated that at present, his company may only get involved in “small deals”. Over a telephonic interview to Reuters, Fink said:
“I believe you're going to see a consolidation in our industry”.
“We're not going to be a big participant (in M&A)”.
 
Furthermore, Fink informed that BlackRock is in the process of “considering three or four small acquisitions” which would be to strengthen the “company's technology and its investment expertise in different assets and geographic regions”. BlackRock began back in the year of 1988 as a “bond-focused fund manager”, which later took to acquisitions for adding “index-tracking exchange-traded funds and equities to its menu of offerings”.
 
Nevertheless, the “traditionalist stock-picking unit” of BlackRock seem to remain a ‘frustrating’ agent, reports Trevor Hunnicutt, while he also added:
“BlackRock's earnings reported on Wednesday showed it attracted nearly $65 billion in new cash from clients in the first quarter, while many of its peers have been trying to stanch outflows. BlackRock oversees $5.4 trillion in assets”.
 
BlackRock’s “massive inflows” opens up vistas asserting the fact that the industry nurturing multiple “brand names” starting from “Fidelity Investments to Pacific Investment Management Co” is now taking on the market as “a winner-take-all game”.
 
While, Hunnicutt informed:
“BlackRock, Vanguard Group and State Street Corp (STT.N) captured nearly 72 percent of the net cash collected globally last year by mutual funds, money market funds and exchange-traded funds, according to Morningstar Inc.”
 
According to Fink:
“Asset managers historically benefited - in most cases, they benefited - from rising beta so you didn't have this need for consolidation”.
 
However, the next turn of growth could turn out to be harder than expected even in the sector of mergers and acquisition along with other “developing new business lines”, while Fink has stressed unusually on the “technology for an asset manager”. Reuters also added:
“BlackRock added revenue by licensing its Aladdin operating system for money managers to its rivals. The company is also exploring how computer models can improve stock picking while reducing costs”.
 
In an announcement of last month, BlackRock revealed its plans of transferring “some responsibilities from more traditionalist fund managers to an internal team known for data-driven approaches to picking stocks”. Fink is hundred percent confident that the said approach will reflect positively in the performance.
 
 
 
References:
http://www.reuters.com







Science & Technology

With China Set To Dominate, 1 Billion Could Be Using 5G By 2023

Deutsche Telekom unveils next gen 5G mobile antennas in Europe

Diamonds are now the new gold

Expert Body Says Driving In A Driverless Car In An Inebriated Condition Or On Drugs Should Be Legalized

SEC’s EDGAR database vulnerable to cyber threats

Research Says The Risk Of Severe Turbulence On Planes Will Increase Due To Climate Change

Barclays and CLS Group aim to replace SWIFT with blockchain

Designing Of Cars Being Done With Hologram Goggles At Ford

The Already Surging Cyber Attacks Are Set To Rise Even Further, Says A Study

Chinese to equip smartphones with OLED displays

World Politics

World & Politics

Scholar Says Political Appointees Not As Important As Financial Ones In China For The Economy

An Expected Change In Brussels Could Be Crucial For The Euro Zone

Destroying People Who Wouldn't Help One Of His Bankrupt Businesses Was All Trump Talked About When He Met Him In 1990s: Branson

Russia Is Worried About America’s Unpredictability

No oil contracts with Iraqi Kurdistan: Iraq’s oil ministry

Donald Trump lost $ 600 million during his presidency

Britain puts its weight behind Europe in the battle between Boeing and Bombardier

EU hopes to keep the Iran nuclear deal afloat