PNC Financial, BlackRock’s top shareholder, has said that it will sell its 22% stake in the investment management company, which is currently worth $17bn, says the Financial Times. BlackRock’s share price has outperformed its listed US fund-management peers for years as the company has “grown and diversified its revenues, in part by expanding into technology”. PNC’s stock price jumped by 6% as investors in the bank welcomed the “long awaited” move, which comes with “tax advantages” that may disappear in the near future. It will also allow it to bolster its balance sheet and “pursue potential acquisitions”.
PNC may be leaving BlackRock for good, but the investment, which cost it just $240m in 1995, has already produced “a steady stream of fees and profits from the asset manager’s robust growth”, say Dawn Lim and Orla McCaffrey in The Wall Street Journal. More broadly, the rise of BlackRock, which manages $6.5trn in assets, is also a sign of how asset managers “have gained ground on the biggest Wall Street banks”. Its reach spans markets from exchange-traded funds to private equity.
PNC’s decision to sell its stake in BlackRock removes a regulatory “headache” for both companies, says Antony Currie on Breakingviews. Still, even after this sale, BlackRock’s sheer size means that it could still face calls “for greater scrutiny”. What’s more, by selling its stake, PNC is “giving up a diversifying income stream that accounted for 15% of earnings last year”; BlackRock is losing a big shareholder whose support it “could count on”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Do you qualify for the Winter Fuel Payment if you live abroad?The Winter Fuel Payment will be means tested for expats living in Europe, in line with the new rules impacting those in the UK. But a quirk in the system means not all countries are eligible.
-
What the Employment Rights Bill means for your jobNew workplace reforms are set to give employees new rights to benefits and flexible working
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsWe round up the best investing apps. Looking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go?
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
