BlackRock Australia is on the way to rebuilding the market share and credibility of its scientific equities business following $3.5 billion of client withdrawals since its merger with Barclays Global Investors (BGI), chief executive Damien Frawley has said.
“It would be naïve for anyone to think that as a result of the merger there wasn’t going to be some outflow of assets,” Frawley said.
“And I want to emphasise that the stress and the strain of the merger was really around that scientific equity business.
“We haven’t lost any assets in fundamental Australian equities, alternatives and, in fact, gained $4 billion in fixed income mandates and picked up $1 billion in index global equities mandates since the merger.”
The BlackRock Australia scientific business, made up of a combination of the BGI scientific team and BlackRock quantitative team, currently managed $8.5 billion, compared to $14.5 billion as at December 2009, he said.
BlackRock Australia overall currently manages $42 billion, compared with $48.5 billion as at December 2009.
The movements in figures were attributable partly to client withdrawals and partly to market movement, Frawley said.
He said the scientific equities team was now very stable following the departures of chief investment officer Morry Waked and portfolio managers Nick Burt, Andrew Jason and David Walsh earlier in the year.
“BlackRock has a very broad bench and the scientific team is very stable now after we appointed Michael McCorry to replace Waked. The team is now extremely well resourced, with a 14-strong team with broad depth of experience across research, portfolio management and strategy,” he said.
“We are also pleased to say that the BlackRock Scientific International Equity Fund was re-rated four stars and the BlackRock Scientific Australian Equity Fund was rated three stars from Standard & Poor’s following the new appointments.”
He said he had no doubt that in time BlackRock Australia would be able to achieve record assets as it rebuilt the domestic scientific business and executed new growth strategies in the next three years.
“The point is whilst what we experienced in scientific equities has not been ideal, in the context of a very diverse Australian business the overall position is still very strong,” he said.
He said BlackRock would continue to beef up its suite of local iShares exchange-traded funds.
“We currently have a product range that is cross-listed from the United States and we are looking at developing a range of products domiciled in Australia and suitable for the Australian retail investor, so expect new developments there in the coming months,” he said.
The firm would also look to transition the BlackRock Scientific Global Markets Fund – a global macro offering that it inherited from BGI – from monthly liquidity to daily, and offer it to planners via platforms.
It ws also a key priority for BlackRock Australia to elevate its Global Equity Fund, Small-cap Global Opportunities Fund and Global Allocation Fund in the market, Frawley said.
