Black Rock Industries History of the Firm

Black Rock Industries

History of the Firm

BlackRock, Inc., the world's largest financial asset and management company, began in a one-room office in New York in 1988. BlackRock, which began under the name of BlackStone Financial Management, was led by Larry Fink and a team of seven others: Keith Anderson, Benett W. Golub, Charles Hallac, Robert S. Kapito, Barbara Novick, Ralph Schlosstein, and Susan Wagner. All were unified by their desire to educate clients; not simply push them into purchasing products they neither needed or understood (Ody 63).

By helping General Electric in 1999 to rid itself of unwanted mortgages BlackRock's presence on Wall Street was solidified. By 2004 the company had grown to $342 billion in assets by selling its products. In 2005 BlackRock purchased State Street Research & Management, followed by an acquisition of Merrill Lynch Investment Management in 2006, Quellos Group in 2007 and R3 Capital Partners in 2009. BlackRock's crowning glory is its 2009 purchase of Barclay's Global Investors, adding $2 trillion to it assests (BlackRock).

Organizational Structure

BlackRock's ownership structure is designed to maintain the independence it believes is necessary to retain its commitments to client focus and investment excellence. It has no single majority stockholder and has a majority of independent directors.

BlackRock divides its holdings into seperate areas: Global Client Group (pension plans, foundations and endowments, financial institutions, official institutions, wealth management); Portfolio Management (fixed income, equity, multi-asset portfolio strategies, liquidity, real estate, alternatives, and risk & quantitative analysis); and BlackRock Solutions (Aladdin® Investment Platform, financial modeling, portfolio analytics, investment data & accounting, financial markets advisory, trasition management, and operations & administration).

Operational Location

BlackRock, Inc. manages assets for its clients world wide. With corporate headquarters in New York, the majority of its offices are located within the United States. The company also has offices in Canada, Mexico, Chile, Brazil, Europe, Asia Pacific (Beijing, Dubai, Hong Kong, Mumbai),Seoul, Singapore, Taipei, Tokoyo, and Australia.

Main Business Lines

BlackRock's main business lines are comprised of its Global Client Group, Portfolio Management, and BlackRock Solutions. Global Client Group is the company's worldwide client platform of individual client businesses, accountable for client relationships and distribution of BlackRock's products and services worldwide. BlackRock's Portfolio Management investment teams manage assets for institutional as well as individual investors. Finally, BlackRock Solutions offers risk management, strategic advisory and enterprise investment services to a range of clients (BlackRock Investors).

Customers & Products

BlackRock's products serve a diversified client base, from major banking institutions down to individual investors wanting to save for their children's college education. In dealing with financial institutions BlackRock has extensive experience working within complex regulatory and operational environments to serve commercial banks and savings institutions of all sizes and locations. The company offers Defined Contribution plans as well as Pension Plans to help organizations and individuals plan for their furtures, as well as offering Mutual Funds, Closed-End Funds, Managed Accounts, College Advantage, and its iShares Exchange to individual investors. BlackRock also offers a broad range of managed portfolio strategies to suit many investment needs and risk profiles (BlackRock Investor). BlackRock holds U.S. $1.43 trillion in assets. It's Financial Advisory group has $44 billion in assets, Alternatives and Real Estate $76 billion, Equity $291 billion, and Liquidity of $345 billion.

Threats and Opportunities

For BlackRock, emerging markets may prove to be a strong contender for future growth. Stocks exposed to fast-growing regions such as China, India, and other emerging markets whose growth rates are quickly leaving the United States far behind appear to be a solid destination for development and investment.

Threats are always on the horizon for any business, the first one being the competition. For the average investor who may feel intimidated by the financial powerhouse BlackRock represents, other financial firms, such as E*TRADE, offer a viable alternative. These companies have chosen to speak to the average joe with plain language and attention grabbing commercials.

Strategies for Growth

BlackRock has ambitions to grow but must first trim some areas. The company is planning to liquidate two municipal bond funds, a financial sector fund and a small-cap fund. The $123 million BlackRock Ohio Municipal Bond Fund and the $76 million BlackRock Kentucky Municipal Bond Fund are slated to be liquidated on July 14, 2011, and the $79 million BlackRock Global Financial Services Fund and the $56 million BlackRock Small Cap Core Equity Fund will liquidate on April 27, 2011.