Connect with us

Is BlackRock Too Big?

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. ]

Concerns Raised at Potential BlackRock Takeover of CalPERS’ Private Equity

The California Public Employees’ Retirement System (CalPERS) has been analyzing options on what to do with its massive US$ 26 billion private equity program. The pension system has embraced the mantra of reducing cost, reducing complexity and reducing risk, the hallmark of its program called “INVO 2020”. CalPERS also wants less, but more strategic relationships with external money managers. At one point, CalPERS was contemplating increasing its direct investment staff to model Canadian pension funds such as Canada Pension Plan Investment Board (CPPIB), OMERS and the Ontario Teachers’ Pension plan. The pendulum has begun to swing the other way as reported earlier by SWFI research staff.

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

Continue Reading

CDP Signs €1.7 Billion Infrastructure Loan Agreement with Atlantia Group

Cassa depositi e prestiti S.p.A. (CDP) and Atlantia Group’s Autostrade per l’Italia (ASPI) have signed a €1.7 billion loan contract dedicated to upgrading motorways in Italy under concession to ASPI. €1.1 billion will come in the form of a term loan with a 10-year tenure, with the remaining €600 million wrapped up in a five-year revolving loan.

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

Continue Reading

Sovereign Funds Commit to Integrating Climate-Related Risks at One Planet Summit

Representatives from a number of sovereign wealth funds who collectively govern over US$ 2 trillion in assets came together at the One Planet Summit at the Élysée Palace in Paris in order to discuss what public asset owners can do to incorporate climate change-related risks and opportunities into investment considerations.

The newly formed committee – called the One Planet Sovereign Wealth Fund Working Group – includes as its founding members the Abu Dhabi Investment Authority (ADIA), Kuwait Investment Authority (KIA), Qatar Investment Authority (QIA), Norges Bank Investment Management (manager of Norway’s Government Pension Fund Global), Saudi Arabia’s Public Investment Fund (PIF), and the New Zealand Superannuation Fund.

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

Continue Reading


© 2008-2017 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.