Barclays Global Investors, often referred to as "BGI", is a wholly owned subsidiary of Barclays Bank plc. Barclays formally accepted an offer from American investment management firm
BlackRockBlackRock Inc. is a major American investment management firm and pioneer of mortgage backed securities in the United States. As of March 31, 2009 BlackRock’s assets under management totaled $1.283 trillion across fixed income, liquidity, equity, alternative investment and real estate strategies,...
to acquire BGI. The acceptance requires to be approved by Barclays’ shareholders at a special meeting in August 2009 and if approved will completing by the end of 2009. Upon completion of the deal BlackRock will became the largest corporate money manager in the world.
Barclays Global Investors, often referred to as "BGI", is a wholly owned subsidiary of Barclays Bank plc. Barclays formally accepted an offer from American investment management firm
BlackRockBlackRock Inc. is a major American investment management firm and pioneer of mortgage backed securities in the United States. As of March 31, 2009 BlackRock’s assets under management totaled $1.283 trillion across fixed income, liquidity, equity, alternative investment and real estate strategies,...
to acquire BGI. The acceptance requires to be approved by Barclays’ shareholders at a special meeting in August 2009 and if approved will completing by the end of 2009. Upon completion of the deal BlackRock will became the largest corporate money manager in the world.
The division is headquartered in San Francisco, and also has research and portfolio management teams in
London[]London is the capital of England and the United Kingdom. It has been a major settlement for two millennia, and the history of London goes back to its founding by the Romans, when it was named Londinium. London's core, the ancient City of London, the 'square mile', retains its medieval boundaries...
,
SydneySydney is the largest city in Australia, and the state capital of New South Wales. Sydney has a metropolitan area population of approximately 4.34 million and an area of approximately 12,000 square kilometres. Its inhabitants are called Sydneysiders, and Sydney is often called "the Harbour City"...
,
Tokyo, officially , is one of the 47 prefectures of Japan and is located on the eastern side of the main island Honshū. The twenty-three special wards of Tokyo, each governed as a city, cover the area that was once the city of Tokyo in the eastern part of the prefecture, totaling over 8 million people....
,
TorontoToronto is the most populous city in Canada and the provincial capital of Ontario. It is located in Southern Ontario on the northwestern shore of Lake Ontario. With over 2.5 million residents, it is the fifth most populous municipality in North America...
and other cities, as well as client service offices in several additional major financial centres in
EuropeEurope is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally divided from Asia to its east by the water divide of the Ural Mountains, the Ural River, the Caspian Sea, the Caucasus Mountains , and the Black Sea to the southeast...
,
North AmericaNorth America is the northern continent of the Americas, situated in the Earth's northern hemisphere and in the western hemisphere. It is bordered on the north by the Arctic Ocean, on the east by the North Atlantic Ocean, on the southeast by the Caribbean Sea, and on the west by the North Pacific...
and
AsiaAsia is the world's largest and most populous continent, located in the eastern and northern hemispheres. It covers 8.6% of the earth's total surface area and with approximately 4 billion people, it hosts 60% of the world's current human population.Asia is traditionally defined as part of the...
.
The firm's Chief Executive is
Blake GrossmanBlake Grossman is the chief executive officer of Barclays Global Investors, the investment management arm of Barclays Bank, the British financial institution....
.
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 investorInstitutional investors are organizations which pool large sums of money and invest those sums in companies. They include banks, insurance companies, retirement or pension funds, hedge funds and mutual funds. Their role in the economy is to act as highly specialized investors on behalf of others....
s under the leadership of
Frederick L. A. GrauerFrederick L. A. Grauer is Senior Advisor to Barclays Global Investors , and was Chairman and Chief Executive Officer of BGI and its predecessors for 16 years...
. Later, it went on to help pioneer the
exchange-traded fundAn exchange-traded fund is an investment vehicle traded on stock exchanges, much like stocks. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. Most ETFs track an index, such...
business (through its
iSharesiShares are units of families of exchange-traded funds managed by Barclays Global Investors. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
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 fundA mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis...
s do not. Since the economics of indexed fund management are heavily influenced by
economies of scaleEconomies of scale, in microeconomics, are the cost advantages that a business obtains due to expansion. They are factors that cause a producer’s average cost per unit to fall as scale is increased. Economies of scale is a long run concept and refers to reductions in unit cost as the size of a...
, 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 PartnersCVC Capital Partners is one of the top five largest private equity firms globally with approximately US$46 billion in funds focused on management buyouts...
, 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
BlackRockBlackRock Inc. is a major American investment management firm and pioneer of mortgage backed securities in the United States. As of March 31, 2009 BlackRock’s assets under management totaled $1.283 trillion across fixed income, liquidity, equity, alternative investment and real estate strategies,...
was announced on June 11, 2009 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).
The resulting company, renamed Blackrock Global Investors, will be the largest asset manager in the world.
External links