![]() ![]() High interest rates will also limit government's spending, so business and government leaders must work together, Fink said. BlackRock has previously said its diversified products "have limited exposure to Silicon Valley Bank." ![]() Reuters reported this week that, based on Morningstar data, mutual funds managed by BlackRock and some others appear to be among the most exposed to the collapse of Silicon Valley Bank and Signature Bank (SBNY.O). He did not refer to BlackRock's own exposure to the regional banks. “The regulatory response has so far been swift, and decisive actions have helped stave off contagion risks. “It’s too early to know how widespread the damage is,” Fink wrote. That will lead bank clients to turn more to capital markets for their financing in the face of what Fink called the "asset-liability mismatches" that doomed Silicon Valley Bank and several smaller institutions. MARKETS ON EDGEįink said it was not clear yet whether the banking crisis precipitated by rising interest rates would claim more victims, but it seemed inevitable that some banks will now pull back on lending to shore up their balance sheets. For more independent commentary and analysis, visit added that is "why BlackRock has been so vocal in recent years in advocating for disclosures and asking questions about how companies plan to navigate the energy transition," although it is not BlackRock's place to tell companies what to do. Jeffrey Goldfarb is an assistant editor at Reuters Breakingviews. At some point, though, the stars should align to give BlackRock a chance to return to its private equity funding roots. There would be cultural and tax-related complications in any transaction, of course. Fink some leeway to pay up for the assets. BlackRock’s steady earnings allow it to fetch a price-to-earnings valuation multiple of 17, while the lumpier profit profile of buyout shops mean the listed players trade on anĪverage ratio closer to 11. Other firms could be more available, though.īrand-name private equity shops that haven’t tapped public equity markets, including TPG, Providence Equity and Hellman & Friedman, may soon need to let senior partners cash out. The satisfying idea of a full-circle deal with Blackstone is financially feasible – BlackRock’s market value is $55 billion and Blackstone’s $38 billion, on a fully diluted basis – but unlikely. Fink might be reluctant to try building another alternatives operation, but he could buy one. Hedge funds are starting to chase the same retail investors. The sums must leave a nagging feeling for BlackRock, especially now that it is so big that it can’t hope to increase its existing business as quickly as in the past. The firm now directs about $110 billion of client money to outside so-called alternative investment funds. BlackRock couldn’t generate enough interest, however, and bailed out a couple of years later. In 2011, he brought in a high-profile team to invest directly in deals. Fink has tried to get into buyouts before. It also underscores how lucrative private equity can be compared with BlackRock’s more traditional That is, in part, a result of a cyclically strong period for selling investments made by the firm’s funds. Will unveil nearly identical profit – using the industry’s widely accepted metric of economic net income - when it reports next week. BlackRock just posted net income of $2.9 billion for last year. There’s a huge gap in the amount of assets the two firms manage, but their bottom lines look remarkably similar. ![]()
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