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Monday, June 10, 2013

BlackRock Makes Sweeping Equity PM Changes

News summary by MFWire's editors

No matter how hard it hurts, sometimes you have to just yank off the bandage.

Consider what BlackRock [profile] has been up to for the past 18-months, according to Pensions & Investments.

The trade publication reports that the fund giant has replace PMs on 80 percent of its active equity teams in the past year-and-a-half.

Recent replacements include the termination of Jean Rosenbaum, who was a managing director and PM on the global opportunities equity team.

BlackRock is taking such drastic action because it has seen $20.5 billion in net outflows from its active equity portfolios in the 12-month period ending March 31. The last quarter saw $5.6 billion in outflows.

Active equity may account for only 7 percent, or $291.7 billion, of BlackRocks $3.9 trillion in AUM, but the revenue from these portfolios generated 20.3 percent of total base fees for the first quarter, according to P&I.

The trade pub says BlackRock has made it clear that more heads may roll if performance continues to sag.

For example, the pub cites comments made by president Robert Kapito at a Credit Suisse Investment Conference held in Miami in February, in which he declared: I will have less patience going forward with underperforming active products, and we will look to replace those teams quicker than we have replaced them in the past.

Read more in Pensions & Investments

Edited by: Tommy Fernandez

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