One of the most dramatic examples of that arc was investing legend Bill Gross. In the intervening years since the last financial collapse, it has stuck to its original ethos as an active fixed income investment company.Īlong with the rest of the active fund management industry, Pimco faced some challenges in an era when belief in star fund managers began to fade. The Newport Beach, California-based firm oversaw $1.8 trillion at the end of the first quarter. The Fed once again called on Pimco as the investment manager for its purchases of commercial paper. He added he’s “very proud of” such work.Īnother giant located across the country, Pimco, is reprising a role it played in the 2008 financial crisis too. “I do believe it’s going to continue to bring opportunities for us,” Fink said on an earnings call on Thursday, referring to BlackRock’s government assignments. Canada’s central bank is bringing in BlackRock as an adviser in purchases of commercial paper, a form of short-term debt companies use to fund day-to-day expenses like payroll.īeyond Covid-19-related mandates, the firm also won a contract to help incorporate sustainability into the European Union banking system. The Fed enlisted the New York-based firm to shepherd three debt buying programs. Today, BlackRock’s role is even more expansive. and American International Group Inc., playing to Fink’s roots in structuring mortgage-backed securities. BlackRock scored mandates to manage portfolios of toxic assets from Bear Stearns Cos. It is the world’s largest global issuer of ETFs today.īlackRock’s government advisory business also cemented some crucial relationships in the fallout from 2008. Moving into passive investing put BlackRock’s growth “on steroids,” Warren said. The British bank sold the prized unit after rejecting U.K. BlackRock first moved into ETFs with its purchase of Barclays Global Investors in 2009, a defining moment in the company’s history. Today it is a formidable giant, overseeing about five times that sum. The firm got its start as a bond-focused shop, and had about $1.3 trillion in assets at the end of 2008. Those funds hold about $4 trillion in the U.S., compared to about $531 billion in 2008, according to data compiled by Bloomberg.īlackRock owes much of its dominance to a well-timed bet on those products. In the trenches of that contraction, investors became more comfortable using exchange-traded funds, which are tethered to indexes and can be bought or sold at any time in the trading day. The economic recession following the 2008 crash helped set that tone. “The one thing that rules in this world is cheap,” said Eric Balchunas, an analyst at Bloomberg Intelligence. stock-tracking funds that cost a few cents for every $100 invested. to offer prices that were once unheard of in the industry. Scale allows a massive firm like BlackRock or competitor Vanguard Group Inc. After 2008, inexpensive index-based investing took off, buoying BlackRock, which holds about two-thirds of its assets in passive funds. “The companies that are going to come out in better shape are going to be the big businesses,” said Greggory Warren, an analyst at Morningstar Inc.įinancial crises can mark inflection points in investor preferences. That may be an advantage amid the current tumult. It became the world’s largest asset manager with $6.5 trillion in assets - a size and breadth that make the firm an essential player on Wall Street, in Washington, and beyond. borders, the Bank of Canada has called on the asset manager as it shapes its response to the meltdown.īlackRock’s government connections reflect the dominance it has achieved in the asset management arena since the last financial crisis. The central bank has hired the firm to help manage its economic relief efforts. BlackRock has a premiere role in helping the Federal Reserve stabilize markets. More than a decade later, the investing landscape has shifted. But back then, it was a smaller firm with a focus on fixed income, closer to Pacific Investment Management Co., which had renowned money managers Mohamed El-Erian and Bill Gross at the helm. provided insight to Trump on coping with the fallout from the pandemic - and once again put his firm at center of a white-hot economic emergency.īlackRock is no stranger to stepping in during a financial crisis cleanup. As President Donald Trump grappled with the coronavirus outbreak last month, he boasted at a press conference of tapping a secret weapon for advice: Larry Fink.

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