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Bloomberg – Credit Suisse Group AG, which sold its Japanese asset management unit in June, will offer alternative investments including private-equity funds to attract the nation’s $800 billion in pension money.
Tokyo-based Credit Suisse Securities (Japan) Ltd., the Japanese brokerage unit of Switzerland’s second-largest bank, won approval on Oct. 2 from Japan’s Financial Services Agency to act as an investment management firm, according to Akira Takahashi, the head of the brokerage’s asset management group. The unit in August hired BlackRock Inc.’s Shinichiro Sato to head a six-member investment team, Takahashi said.
Reuters – Bank of America Corp’s primary investment management unit is drawing lower than expected bids after its likeliest suitor, BlackRock Inc, inked a blockbuster deal to buy Barclays Global Investor, the Financial Times reported, citing people close to the matter.
Bank of America has been trying to sell its Boston-based Columbia Management unit since earlier this year, but the bank has so far not announced a deal for the unit.
The company is hoping to get at least $3 billion from a sale of Columbia Management, but bids so far have come in closer to $2 billion, the paper said, citing the people.
West Palm Beach (HedgeCo.net) – BlackRock, Inc. announced the purchase agreement to acquire Barclays Global Investors, including its market-leading ETF platform, iShares, from Barclays PLC.
“We are incredibly excited about the potential to significantly expand the scale and scope of our work with investors throughout the world. The combination of active and passive investment products will be unsurpassed, and will enhance our ability to offer comprehensive solutions and tailored portfolios to institutional and retail clients,” said Laurence D. Fink, BlackRock Chairman and CEO. “People are at the heart of successful firms, and the depth of talent in BlackRock Global Investors will be tremendous. The thought leadership and intellectual capital of the combined firm ensure we will remain at the forefront of addressing key investment issues and trends that have emerged over the past decade and are now accelerating dramatically, including globalization of capital markets, a greater focus on asset allocation, multi-asset class solutions, fiduciary management, risk management and advisory services.”
The combination of BlackRock and BGI would bring together market leaders in active and index strategies to create the preeminent asset management firm operating under the name BlackRock Global Investors. The transaction would create an independent and fully integrated asset management firm with combined assets under management of over $2.7 trillion.
The firm’s products will include equities, fixed income, cash management and alternatives, and will offer clients diversified access to global markets through separate accounts, common trust funds, mutual funds, ETFs, hedge funds, and closed-end funds.
BlackRock has received commitments from a group of institutional investors to purchase 19.9 million shares at the closing of the transaction for a total of $2.8 billion.
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West Palm Beach (HedgeCo.net) – BlackRock, Inc. confirmed that negotiations are ongoing with U.K.’s third-largest bank, Barclays Bank plc, about the potential purchase of Barclays Global Investors (BGI), including the iShares business.
“The discussions are not yet concluded and there are a number of significant open issues which could affect the nature and terms of any transaction,” Barclays said in a statement.
BlackRock’s BGI buyout will break its own record in a hedge fund transaction, when in 2006 BlackRock took over Merrill Lynch’s asset management business for $8.5 billion. The unconfirmed selling price is $12 billion to $13 billion. Other contenders for Barclays Global Investors include the Bank of New York Mellon and some Kuwaiti sovereign wealth funds, among others.
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Financial Post – Barclays PLC, the U.K.’s third-largest bank, is in talks with BlackRock Inc. and other bidders to sell its asset management division for more than US$10-billion.
BlackRock, the world’s biggest publicly traded asset manager, is the leading contender to buy Barclays Global Investors, people familiar with the situation said June 6. London-based Barclays has also held talks about selling BGI to Bank of New York Mellon Corp, the people added. The bank is seeking more than US$12-billion for the unit, and may keep a 20% stake in the merged company, one of the people said.
Retaining a stake "is an intelligent way to structure the deal," said Danny Clarke, a Liverpool-based analyst at Capital Group PLC, who has a "hold" rating on Barclays. "It strikes a balance between short and long-term goals, boosting capital and retaining some earnings."
Bloomberg – BlackRock Inc.’s global macro fund, the world’s second-best performer over two years among hedge funds that invest based on economic trends, is betting against this month’s equities rally and buying bonds as a recovery from the worst credit crisis since the Great Depression falters.
BlackRock’s A$216 million ($152 million) Asset Allocation Alpha Fund returned 41 percent in 2008, when hedge funds around the world lost a record 19 percent on average. The fund is short U.S. and Australian equities, expecting them to decline, and long U.S., German, Australian, Canadian, and U.K. bonds, said its manager David Hudson.
“The risk is that the economic recovery disappoints in the second half and that equity markets need to revisit their lows in the next few months and maybe go through them,” Sydney-based Hudson said in an interview March 20.
The MSCI World Index, which tumbled 42 percent last year, has rallied 21 percent since March 9, boosted in part by the U.S. Federal Reserve’s decision to pump money into the economy to get credit flowing. Hudson profited from the declines last year by betting against equities.
BlackRock, which oversees $1.3 trillion, is the biggest publicly traded asset manager in the U.S. Over a third of total assets are managed on behalf of non-U.S. investors, and nearly one-third of its employees are outside the U.S.
