BlackRock Assets Surpass $6 Trillion | Chief Investment Officer

The world’s largest asset manager is now a titanic $6.5 trillion, thanks to a friendly first quarter.

BlackRock returned 9% for the quarter ended March 31, and was 3.1% higher than the year prior, generating total net inflows of $64.6 billion.

“Seinfeld” co-creator and “Curb Your Enthusiasm” star Larry David might say the organization did “pretty, pretty, pretty, pretty good.”

Most of the money came from the giant’s fixed-income strategies, a hefty $79.9 billion. Another $6.8 billion flowed in from alternatives, and cash management strategies provided another $5.6 billion. Advisory strategies kicked in another $1 million.

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The fudge on BlackRock’s sundae, however, was a little too hot. Equities lost $26 billion, and multi-asset strategies fell by $1.6 billion. That said, stock-based tactics are still up over the one- (63% fundamental, 27% systemic, and 97% indexed), three- (73%, 87%, and 99%), and five-year periods (83%, 87%, and 98%).

Larry Fink, the firm’s chairman and chief executive officer, said the “breadth of our investment capabilities” allowed the company’s strong returns and its ability to “continue to meet the evolving needs of our global clients.” He also pointed out that iShares was again its top global exchange-traded fund (ETF) industry flows, which helped a good $32 billion of that inflow from the fixed-income portfolio.

Fink also noted BlackRock’s first close of Long Term Private Capital, its new direct private equity vehicle. He also spoke of tech, specifically its 11% return from Aladdin technology investments. He also announced the firm’s deal to acquire software developer eFront, saying the two technologies will “set a new standard in investment and risk management technology.”

In other news, BlackRock has hired Xiaodong (Tony) Tang to run a new position which oversees its China business. The former GF Holdings CEO will split his time among Beijing, Shanghai, and Hong Kong. He will report to Geraldine Buckingham, BlackRock’s chair and head of Asia Pacific.

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Tags: Asset Management, BlackRock, Larry Fink, Returns, Tony Tang

By 2030, the $207.4 billion New York State Common Retirement Fund should ensure that all of its assets are sustainable, a study group recommended.

The report defines that as containing the earth’s rising temperature to be below 2 degrees Celsius over the pre-industrial level, as called for in the Paris Agreement. The accord seeks to create a carbon-neutral world by 2050.

The study group, convened by Gov. Andrew Cuomo and State Comptroller Thomas P. DiNapoli, said the pension fund can do this by boosting its sustainable investments. Plus, it called on the retirement program to develop a new climate solutions allocation while creating minimum standards to put engagement and potential divestment from pollutants first.

“The transition to a low-carbon economy and the physical impacts of climate change are well underway, and New York must do more to be ready,” said DiNapoli, who oversees the pension fund.

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Other suggestions in the report were for the fund to appoint a head of client solutions position to monitor the portfolio, and as well as adopt sustainability benchmarks. It also asks the fund to educate its members and partner with agencies such as the New York State Energy Research and Development Authority, to establish a sustainable lending facility.

“Our panel of distinguished experts aimed high with our recommendations because we believe that urgent action is necessary to address climate-related risks and opportunities,” Williams said. “Adapting a portfolio as large as the New York State Common Retirement Fund to a 2-degree or lower future by 2030 will be challenging but it can be done over time with additional resources and thoughtful planning.”

Team members consist of six experts from financial, legal, environmental, and energy backgrounds who are voluntarily serving.

The group, dubbed the Decarbonization Advisory Panel, was tasked in March 2018 with studying the financial impacts of climate change and providing recommendations on how the pension program can help remedy the situation.

“To address the risks of climate change, New York will continue to take bold action to invest in the use of renewable resources, support the growth of sustainable businesses, and help build a clean energy economy,” Cuomo said in the initial press release creating the panel.

Tags: Andrew Cuomo, Decarbonization Advisory Panel, ESG, New York State Common Retirement Fund (NYCRF), Pension, Thomas P. DiNapoli