Barclays Global Investors, often referred to as "BGI", is part of American investment management firm BlackRock. Blackrock became the largest corporate money manager in the world after acquiring BGI on June 11, 2009 from Barclays plc, its parent company[1]. The deal still needs to be approved by the Barclays board, but this is regarded as a formality. It will be complete by the end of 2009.
The deal will see Barclays Global Investors renamed BlackRock Global Investors.[2]
The division is headquartered in San Francisco[3], and also has research and portfolio management teams in London, Sydney, Tokyo, Toronto and other cities, as well as client service offices in several additional major financial centres in Europe, North America and Asia [4].
The firm's chief executive is Blake Grossman.
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History
Barclays Global Investors began as a unit of Wells Fargo Nikko and Barclays Bank which merged in 1996. It invented the first passive index investing strategy for major institutional investors under the leadership of Frederick L. A. Grauer. Later, it went on to help pioneer the exchange-traded fund business (through its iShares brand), which is a security that can be traded at any time, and whose value is based on the value of a basket of stocks, bonds or commodities. ETFs can give tax advantages and intraday trading mechanical benefits that other products such as mutual funds do not. Since the economics of indexed fund management are heavily influenced by economies of scale, Barclays grew to be the largest asset managing company in the world.
Since 2000, Barclays Global Investors' active fund management business grew significantly, to the point where it accounted for approximately 50% of the firm's revenue in 2006. However, like other actively managed hedge funds, it was badly affected in the quant fund meltdown in 2008. The passively managed iShares arm, in contrast, performed extremely well, accounting for about 45% of the revenue of the firm in 2008. At the end of 2008, the iShares division, with more than $290 billion in assets, accounted for about half the U.S. ETF industry.
In April 2009, Barclays,its parent company proposed selling its iShares arm to CVC Capital Partners, a private equity firm that had agreed to pay more than $4 billion. However, under a 45-day "go shop" clause, a later bid by BlackRock was announced on June 11, 2009[5] for the whole of BGI, in a mixed cash-stock deal worth around $13.5 billion (37.8 million shares of common stock and $6.6 billion in cash)[6].
The resulting company, renamed Blackrock Global Investors, will be the largest asset manager in the world. It is also the largest privately-held beneficial owner of companies in the world.
References
- ^ http://www.reuters.com/article/businessNews/idUSTRE55B06X20090612?feedType=RSS&feedName=businessNews
- ^ http://www.hedgeweek.com/articles/detail.jsp?content_id=336162
- ^ BGI site "About us" page, as of December 2007
- ^ BGI site "Locations" page, as of August 2006
- ^ "Blackrock to acquire stake in Barclays unit, NYT, June 12, 2009". http://www.nytimes.com/2009/06/12/business/global/12barclays.html?partner=rss&emc=rss.
- ^ "The Blackrock acquisition of BGI - The deal structure". http://wsj.dealogic.com/Blackrock-BGI-628022.htm.
See also
External links
- Official site
- Official US iShares site
- Official European iShares site
- Official Canadian iShares site
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