Friday, 12 June 2009

BlackRock Global Investors joins the too big to fail elite

BlackRock Global Investors bringing it all together under one roof - surely, yet another contender to join that special elite in modern finance - institutions that are Too Big To Fail and Too Big to Manage .

The following comes from a piece in the WSJ today.
BlackRock reached an agreement to buy Barclays Global Investors from Barclays PLC for $13.5 billion, creating a money-management titan roughly twice the size of its closest competitor.

The price represents a substantial premium to what analysts thought BGI would fetch and underscores how capital markets have revived in recent months. It represents a big payday for both Barclays and some of its executives.

The firm, renamed BlackRock Global Investors, will have more than $2.7 trillion in assets under management. The deal makes BlackRock, already a major player in actively managed stock, bond and alternative-investment products, an indexing giant and the largest U.S. provider of exchange-traded funds.

It is also somewhat curious that Barclays are selling this unit now as they have recently been going to great lengths to protest how well capitalized they are.

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