Pricey Acquisition Drives Growth At Investment Manager

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Investment managerBlackRock ( BLK ) has come a long way from its roots as a risk management and fixed-income firm.

It's now one of the biggest asset managers in the world with a formidable presence in the exchange-traded fund ( ETF ) market.

In December 2009, BlackRock acquired Barclays Global Investors, including its iShares ETF platform, from U.K.-basedBarclays PLC ( BCS ) for about $13.5 billion. IShares is currently the largest ETF provider in the world with more than 500 funds and more than $645 billion in assets under management.


In October, BlackRock reported third-quarter earnings and sales growth that was in line with expectations. Earnings rose 12% from a year ago to $3.88 a share. Sales rose 7% to $2.47 billion. Long-term net inflows totaled more than $25 billion in the quarter. About 80%, or $20 billion, flowed into the company's iShares ETFs.

BlackRock also has solid mutual fund sponsorship. Fidelity Contrafund increased its position in the latest quarter.

BlackRock hasn't been shy about making deals to beef up its business. In 2004, it bought State Street Research & Management from MetLife for about $375 million. In 2006, it acquired Merrill Lynch's investment management business.

Last month, it completed the acquisition of MGPA, a private-equity real estate investment advisory company in Asia-Pacific and Europe. The deal almost doubles the amount of money that BlackRock has invested in real estate around the world to $25 billion.

CEO Laurence Fink isn't afraid to opine about the markets. Last week at the annual meeting for the Securities Industry and Financial Markets Association in New York, Fink said the Federal Reserve should start tapering in December or risk creating a bubble.

In September the company paid a quarterly dividend of $1.68 a share. It currently yields 2.2% on an annualized basis.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: BCS , BLK , ETF

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