BlackRock is to trim up to 600 jobs, or about 3 per cent of its global workforce in a move announced last week as the world’s biggest fund manager also reclaimed the US$10 trillion heights and splashed out US$12.5 billion on an infrastructure outfit.
The latest staff cuts follow a similar headcount reduction last year as manager adjusted to a fall in assets under management in 2022 from US$10 trillion to US$9.1 trillion at the end of September last year.
But in its December quarter results released last Friday, BlackRock reported assets under management of US$10 trillion following annual net inflows of almost US$290 billion including US$96 billion in the last three months of the year.
The earnings call also coincided with news of a “strategic re-architecture” of the business around the fast-growing exchange-traded funds (ETF) and indexing operations.
Larry Fink, BlackRock chief, said in a statement: “We always viewed ETFs as a technology, a technology that facilitated investing. And just as our Aladdin [risk management] technology has become core to asset management, so too have ETFs. That’s why we believe embedding our ETF and Index business across the entire firm will accelerate the growth of iShares and every investment strategy at BlackRock.”
At the same time, the firm paid US$12.5 billion – comprising US$3 billion in cash with the remainder in BlackRock scrip – to acquire US-based operation, Global Infrastructure Partners (GIP). The deal catapults BlackRock to the second-largest infrastructure manager in the world with US$150 billion in assets (GIP contributes more than US$100 billion) behind Australian giant, Macquarie.
“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,” Fink said in a release. “We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritize self-sufficiency and security through increased domestic industrial capacity.”
Overall, BlackRock employs about 20,000 people.
Announcing the layoffs prior to the GIP buy, Fink, and president, Rob Capito told employees in a note that staff numbers would likely increase by year-end as the company restocks resources in growth sectors such as exchange-traded funds (ETFs) and private markets, according to US press reports.
The job cull comes, too, amid an epoch-defining transformational period for the global funds management industry, Fink and Capito said in the note.
“… we see our industry changing faster than at any time since the founding of BlackRock. Thanks in large part to the outstanding work of our iShares team — ETFs are becoming ubiquitous as the preferred vehicle for delivering both index and active investment strategies.
“Growth is coming from a wider range of markets around the world than ever before — across Europe, the Middle East, India, and other markets in Asia,” they continued. “And, perhaps most profound, new technologies are poised to transform our industry — and every other industry.”
BlackRock Australasia has yet to confirm whether the company-wide staff shrinkage has impacted employees in the region.
The firm has seen significant growth in both Australia and NZ, where it is the largest single asset manager in the KiwiSaver sector after securing mandates with both ASB and AMP as well as a flagged investment services arrangement with the $30 billion plus ANZ funds business. Last year, too, the manager revealed plans to establish a $2 billion climate change fund focusing on NZ assets with the support of the-then Labour government.
BlackRock is also slated to open an office in Auckland early this year to support local institutional clients.