Connect with us

Is BlackRock Too Big?

Published

on

BlackRock NY

With continued loose monetary policy and relatively less regulatory hurdles than banks and brokers, gargantuan U.S. asset management firms have financially prospered over the past years. According to an SEC filing, as of December 31, 2014, BlackRock reached US$ 4.652 trillion in assets under management. This monumental figure is an 8% increase from last year’s number. In 2006, BlackRock’s assets under management crossed the US$ 1 trillion threshold. To put things into perspective, the U.S. retirement market in 2013 was worth US$ 23 trillion, according to the Investment Company Institute (ICI). Using BlackRock’s assets under management figure for December 2013 of US$ 4.324 trillion, the asset manager stacks up, as being almost a fifth the size of the whole U.S. retirement market. BlackRock’s AUM is majority made up of institutional investors at 65% – a key revenue generator. The asset manager counts sovereign wealth funds, central banks, pensions, life insurance companies and endowments as major clients.

BlackRock’s Assets Under Management


Data: Trillions USD – December End Dates

We Are the Good Guys

In the post-global financial crisis years, DC policymakers are identifying potential systemic threats to the global financial system. The easy culprits were the over-leveraged banks and insurance companies. Traditional asset managers have faced far less scrutiny compared to hedge funds, investment banks and insurance companies.

However, the concentration of assets in large asset managers has steadily grown over the years.

Asset managers contend, due to their very nature of managing other people’s money, they are not taking specific risk on their own balance sheets. Thus, investment managers believe they are less susceptible to financial distress versus banks, brokers and insurers. Brand name managers such as PIMCO, BlackRock and Fidelity Investments have further debated that asset managers like them, should not be designated systemically important financial institutions (SIFI). BlackRock is using its financial muscle to lobby on Capitol Hill. According to the Center for Responsive Politics, since 2010, BlackRock has spent over US$ 1 million in annual lobbying.

In late 2014, the debate between the FSB and the SEC has shifted toward analyzing an asset manager’s products and services versus an individual asset manager.

Potential Criteria For Asset Managers

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Biogen and Eisai Battered by Markets Over Alzheimer’s Trial Fail

Published

on

Cambridge, Massachusetts-based Biogen Inc. (BIIB) took a tumble of 28% in the morning of March 21st after it announced that it would cease its Phase 3 trials of Aducanumab. The therapy was intended to slow cognitive decline in patients with early onset Alzheimer’s. Biogen continued falling on March 22, 2019. Biogen and its Japanese development partner Eisai Co., Ltd. (ESALY) shared that the decision was based on results from an analysis conducted by an independent committee. The analysis determined that the trials were not going to demonstrate that Aducanumab could slow cognitive impairment. Eisai also fell 28% on the day, though it staged a relatively modest recovery on March 22nd. Some large institutional holders of Biogen include APG Asset Management (manager of Stichting Pensioenfonds ABP), Norges Bank Investment Management (manager of Norway Government Pension Fund Global), and Swiss National Bank.

The last time a treatment for Alzheimer’s made it to market was in 2003. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Italy’s CDP Inks Deals with Silk Road Fund and Bank of China

Published

on

China is building out its Belt Road Initiative (BRI) to continental Europe. On March 23, 2019, in Rome, Cassa depositi e prestiti Spa (CDP), Snam Spa (Snam) and Silk Road Fund Co., Ltd signed a Memorandum of Understanding (MoU) aiming at exploring and evaluating common business opportunities. Under the MoU, CDP and the Silk Road Fund will facilitate cooperation by focusing on the potential investment opportunities in the following sectors: financial services, agriculture, food, technology, manufacturing, infrastructure and transportation, energy and white economy (healthcare and personal care assistance).

Originally part of ENI, Snam S.p.A. is an Italian natural gas infrastructure company. The Silk Road Fund and Snam will analyze possible collaboration initiatives in the area of natural gas infrastructure (pipelines, storage facilities, LNG infrastructure and biomethane plants) in support of the growth of the natural gas and biomethane sectors in China from a decarbonisation perspective. In its capacity of a national promotion institutions, CDP will look at co-financing initiatives that are consistent with its mission also in the fields of energy and sustainability.

Bank of China

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Angolan Government Recovers Assets from Quantum Global Investment Management

Published

on

The State Prosecutor’s Office of Angola said that the country has control of all financial and non-financial assets. The Angolan government claims it recovered US$ 3.35 billion of assets that were under the management of Swiss-based Quantum Global Investment Management AG. Quantum Global Investment Management was essentially the sole manager of assets for the Fundo Soberano de Angola (FSDEA).[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Popular

© 2008-2018 Sovereign Wealth Fund Institute. All Rights Reserved. Sovereign Wealth Fund Institute ® and SWFI® are registered trademarks of the Sovereign Wealth Fund Institute. Other third-party content, logos and trademarks are owned by their perspective entities and used for informational purposes only. No affiliation or endorsement, express or implied, is provided by their use. All material subject to strictly enforced copyright laws. Registration on or use of this site constitutes acceptance of our terms of use agreement which includes our privacy policy. Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund and central bank events around the world. SWFI is a minority-owned organization.