Why BlackRock has an inorganic strategy for different markets



Entering emerging markets

BlackRock (BLK) is focusing on diversifying its expanding portfolio more through acquisitions and offerings in emerging markets. In 2013, it acquired MGPA. It’s an independent private equity property investment advisory firm. Originally, MGPA was the division of Macquarie Group (MIC). The deal’s amount wasn’t disclosed. The Financial Times stated that the deal was around $200 million.

With the purchase of MGPA, BlackRock doubled its total property investments to more than $25 billion.

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Through its current investments, BlackRock is focused on the markets in the US and the United Kingdom. Through the acquisition of MGPA’s assets, it entered into Asia and Continental Europe. MGPA has some high-quality investments that include the Ginza office and the Asia Square towers in Singapore, the retail plaza and Fuji Grand Imabari shopping center in Tokyo, the AXA Tower and Galleria Chengdu in China, and the Intermark shopping mall in Kuala Lumpur.

Through the acquisition, BlackRock increased the options for clients wanting to make more returns in the volatile markets.

Acquisitions in European markets

In 2013, BlackRock also acquired Credit Suisse’s ETF business (CS). It has prime exposure in Switzerland and Luxembourg. Strategically, this fits with iShares ETFs. The acquisition brought in assets of over $8 billion spread across equities, fixed income, and gold funds. It increased BlackRock’s market share to 47.5% in the European ETF market share. It increased BlackRock’s share to 82% in the physical ETF market share.

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BlackRock also acquired Claymore Canada in 2012 from Guggenheim Partners LLC. The acquisition increased its market share in the Canadian ETF market. In 2012, it also concluded the acquisition of Swiss Re Private Equity Partners (SRPEP) AG, the European private equity and infrastructure fund of funds arm of Swiss Re Ltd.—a fund management group. SRPEP AG had total commitments of over $7 billion, with a mandate for investments in Europe and Asia’s infrastructure.

Acquisitions support size

In 2009, through acquisition of Barclays Global Investors (BGI)—an arm of Barclays Plc (BCS)—BlackRock became the world’s largest asset management company at the time. The deal was valued at about $13 billion in cash and stock transactions.

In 2007, BlackRock acquired a fund of funds arm of Quellos Group. The firm merged with BlackRock Alternative Advisors. It serves as the fund of funds platform.

BlackRock made several acquisitions. It expanded at a quick pace. It acquired business from State Street (STT), the Quellos Group, R3 Capital Management, and other major players part of the Financial Select Sector SPDR Fund (XLF). It also acquired Merrill Lynch’s investment management arm in 2006. This was the second largest deal after BGI.


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