| NEW YORK, April 19
NEW YORK, April 19 BlackRock Inc Chief
Executive Officer Larry Fink, who runs the world's largest asset
manager, on Wednesday forecast a wave of mergers and
acquisitions in asset management, but said his company may be
limited for now to small deals.
"I believe you're going to see a consolidation in our
industry," Fink told Reuters in a telephone interview, citing
previous waves in industries such as banking.
Even so, he said, "We're not going to be a big participant"
in M&A. He did say BlackRock is considering three or four small
acquisitions that would be focused on shoring up the company's
technology and its investment expertise in different assets and
Started as a bond-focused fund manager in 1988, BlackRock
later used acquisitions to add index-tracking exchange-traded
funds and equities to its menu of offerings. Yet its
traditionalist stock-picking unit has remained a source of
BlackRock's earnings reported on Wednesday showed it
attracted nearly $65 billion in new cash from clients in the
first quarter, while many of its peers have been trying to
stanch outflows. BlackRock oversees $5.4 trillion
The massive inflows at BlackRock raise the prospect that an
industry that has nurtured dozens of brand names from Fidelity
Investments to Pacific Investment Management Co is increasingly
turning into a winner-take-all game.
BlackRock, Vanguard Group and State Street Corp
captured nearly 72 percent of the net cash collected globally
last year by mutual funds, money market funds and
exchange-traded funds, according to Morningstar Inc.
"Asset managers historically benefited - in most cases, they
benefited - from rising beta so you didn't have this need for
consolidation," said Fink, referring to how rising markets
boosted asset managers' earnings.
The next leg of growth may be harder, including M&A and
developing new business lines.
Fink has placed an unusual emphasis on technology for an
BlackRock added revenue by licensing its Aladdin operating
system for money managers to its rivals. The company is also
exploring how computer models can improve stock picking while
Last month, BlackRock announced plans to transfer some
responsibilities from more traditionalist fund managers to an
internal team known for data-driven approaches to picking
In the interview, Fink said he has "100 percent confidence"
that approach will help performance.
The company's overhaul of its active equities franchise
includes doubling-down on niche geographic specialties, such as
Asia, where it may have a greater chance to beat the market.
(Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and