BlackRock’s top shareholder sells out
PNC Financial, BlackRock’s top shareholder, is to sell its 22% stake in the investment management company.
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”.
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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