"I expect to see a dramatic consolidation in the investment management business," Laurence Fink, chairman and chief executive of the biggest publicly traded U.S. asset management firm, told an earnings conference call.
BOSTON (Reuters) - Money manager BlackRock Inc <BLK.N> expects a "dramatic consolidation" in the asset management industry as the credit crisis hurts the quality of assets, the firm's CEO said on Wednesday.
"I expect to see a dramatic consolidation in the investment management business," Laurence Fink, chairman and chief executive of the biggest publicly traded U.S. asset management firm, told an earnings conference call.
"I believe you are going to see institutions who are struggling with low P/Es (price-to-earnings ratios) or struggling with asset quality problems who are going to look to embellish their capital through either sales of their asset management business or contributions of their asset management business," Fink said.
BlackRock has grown rapidly through acquisitions over the past few years. In 2006 it acquired Merrill Lynch and Co's <MER.N> funds unit for $9.5 billion, the biggest purchase yet in the U.S. fund industry. And last year it bought the fund of funds business of Quellos Group LLC for $1.7 billion.
!ADVERTISEMENT!Fink, who co-founded BlackRock 20 years ago, said the company will continue to be "very judicious" in making acquisitions.
"I don't want to suggest that we will be doing a transaction any time soon. I can suggest that we've had many enquiries from many institutions about opportunities in working alongside or doing something with BlackRock," Fink said.
He said the company was examining entering the exchange-traded funds (ETFs) business with partners. These funds track indexes and trade, like stocks, on exchanges.
"We are studying it actually with one large player who's in the ETF business right now to see if we can do things together, and we are studying it with a large distributor who we are working together trying to create different ETF-types of ideas," the BlackRock CEO said.
Merrill is BlackRock's biggest shareholder with a 49 percent stake. PNC Financial Services Group <PNC.N> owns 34 percent of the firm.
BlackRock has $1.36 trillion in assets and a market value of about $24 billion. Its shares were down 0.51 percent at $204.15 in afternoon trading.
(Reporting by Muralikumar Anantharaman; editing by John Wallace)
