According to a Financial Times report,
) plans to close nearly 250 funds from its existing range of
products. This is a concerted effort to focus more on products
that account for a higher proportion of revenues.
Recently, in its investor day conference, BlackRock announced
that it manages over 7000 varied portfolios. Of these, the top
50%, comprising about 3000 fund vehicles, currently generates
nearly 99% of the company's total fund revenues. Subsequently,
the bottom 50% of the portfolios contributes a meager 1%.
Therefore, BlackRock is required to rationalize these funds in
order to perform more efficiently.
Last year, BlackRock had closed nearly 250 funds in order to
rationalize the bottom 50% of its portfolio. Further, the closure
of an additional 250 funds in 2013 will result in the company
shutting nearly 1/6th of its fund vehicles.
Alongside, in Mar, 2013, BlackRock announced around 300 job cuts,
which equaled nearly 3% of the company's total workforce as of
Dec 31, 2012. The layoffs were a part of BlackRock's
reorganization efforts that included restructuring of its
Furthermore, BlackRock's fund group has consolidated its
Australian fund range. The company has closed over 90 portfolios.
This equals to about 50% of various portfolios that the company
offers to its clients in Australia. These factors have resulted
in the strengthening of BlackRock's position in Australia that
will augment its growth.
The process of rationalizing the company's portfolios is pivotal
for BlackRock. This will help enhance the capacity and reduce
complexity in the company's business, which in turn will prove to
be beneficial for BlackRock.
BlackRock currently carries a Zacks Rank #3 (Hold). Some better
performing asset managers include
Artisan Partners Asset Management Inc
GAMCO Investors, Inc
Noah Holdings Limited
). All these carry a Zacks Rank #1 (Strong Buy).
ARTISAN PTNR AM (APAM): Free Stock Analysis
BLACKROCK INC (BLK): Free Stock Analysis
GAMCO INVESTORS (GBL): Free Stock Analysis
NOAH HLDGS LTD (NOAH): Free Stock Analysis
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