BlackRock Inc., the world’s biggest money manager, is set to lose assets it oversees for the $42.9 billion Massachusetts state pension fund because of concern that the firm isn’t adequately focused on some fixed-income markets.
The pension’s board voted unanimously today to shift about $1 billion invested in BlackRock’s actively managed bond portfolio to its passive fixed-income fund pending an asset- allocation review and finding a new manager. BlackRock manages $3.6 billion for the plan, including $1.3 billion already in the passive fund and a similar amount in inflation-protected securities, according to a memo released at a board meeting.
There’s been a “diminished emphasis on core fixed income” at New York-based BlackRock, which the state hired in 1999, the plan’s investment committee said in the memo to the Pension Reserves Investment Management Board, or PRIM. “PRIM staff lacks confidence that the firm is adequately focused,” the memo said. It estimated a fee savings of $1.1 million a year.
Laurence D. Fink helped start BlackRock in 1988 as a fixed- income investment firm. It has grown through a series of acquisitions, including Barclays Global Investors a year ago. The firm had $3.45 trillion of assets under management at the end of the third quarter, up from $165 billion in 1999, the state memo said.