- the world’s largest fund manager - late last week confirmed to this publication that it is shedding up to 3 per cent of its workforce, equivalent to about 500 staff in the next few weeks.
"About 500 colleagues worldwide (or 3 per cent) will be leaving the firm in the weeks ahead. Some businesses will be more impacted than others as we reallocate resources to our most critical growth opportunities," Rob Kapito, president of the US-listed firm, said in a memo seen by this news service. "The uncertainty around us makes it more important than ever that we stay ahead of changes in the market and focus on delivering for our clients. We are asking everyone in the firm to embrace the changes that this environment requires to continue driving future growth and delivering for our clients and shareholders."
"Following these departures, our headcount will still be 4 per cent higher than a year ago. 2018 was a year of significant investment in growth. We built out our technology capabilities – enhancing Aladdin, opening our new AI Lab, and investing in Envestnet and Acorns. We acquired Tennenbaum Capital to deepen our private credit capabilities. And we bought Citibanamex’s asset management business to increase our presence in Mexico’s fast-growing market," he continued.
BlackRock reports fourth-quarter 2018 earnings on 16 January.
A spike in market volatility and new technology designed to squeeze costs is prompting the firm, overseeing about $6.4 trillion of assets, to act. BlackRock is already well known for iShares exchange traded funds brand. ETFs, which are typically low-cost funds tracking indexes, have boomed over the past decade on the coattails of a rising stock market and as investors became disenchanted with more expensive actively managed funds. More challenging markets, however, might force even the leanest business models that benefit from economies of scale to adjust.
As noted by Bloomberg yesterday, State Street, the Boston-headquartered firm, is cutting up to 15 per cent of its senior managers.
As reported earlier this week, BlackRock and RBC Asset Management have inked a strategic partnership to distribute ETFs into the Canadian market, aiming to grab market share in a country where the ETF sector is worth around $120 billion in terms of AuM (source: ETFGI).
Bloomberg has reported that Mark Wiedman, head of the ETF arm, has been promoted to a new global strategy role and that more leadership roles are in the offing.
Source: Nasdaq