BlackRock, the world’s largest investment firm with $5.1 trillion (£4.11 trillion) of assets, has announced a shake-up of its US business that will reduce the number of its funds run by active stock pickers as it responds to the threat from cheap, index-tracking rivals.
The company has removed seven portfolio managers from funds with around $30 billion (£24.17 billion) of assets under plans to shift more of its domestic business from active equity management towards a numbers-driven quantitative approach. Some will leave the group with BlackRock paying $25 million (£20.15 million) in severance and bonuses to those affected.
Although the changes do not affect any Blackrock funds managed outside the US they are significant in terms of how conventional investment managers respond to the challenge from trackers, in particular exchange traded funds (ETFs).
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