|Bid||485.78 x 800|
|Ask||496.06 x 900|
|Day's Range||491.85 - 499.70|
|52 Week Range||360.79 - 499.70|
|Beta (3Y Monthly)||1.55|
|PE Ratio (TTM)||19.14|
|Earnings Date||Jan 14, 2020 - Jan 20, 2020|
|Forward Dividend & Yield||13.20 (2.69%)|
|1y Target Est||511.21|
(Bloomberg) -- Not long before the departures began, Larry Fink warned his top lieutenants: Behave or else.BlackRock Inc.’s chief executive officer was speaking last year at a scheduled meeting of his global executive committee, a group of about 20 of the company’s highest-ranking officials. During a conversation about corporate ethics, Fink and others discussed how their behavior would be held to a higher standard than other employees, according to people with knowledge of the meeting.Two of the men in that senior leadership group are now gone from the world’s largest asset manager. Mark Wiseman, once seen as a possible successor to Fink, was terminated this week for having an affair with a subordinate. Jeff Smith, who led global human resources, was dismissed in July for violating an unspecified company policy.A BlackRock spokesman declined to comment on the 2018 meeting.Both departures were announced in bluntly worded memos sent to approximately 16,000 employees worldwide, a sign of how serious Fink and President Rob Kapito are about punishing any misconduct among top officials as the firm seeks to position itself at the forefront of environmental, social and governance issues.Protecting ReputationWith almost $7 trillion under management, mostly in index-linked products, BlackRock is one of the largest shareholders in virtually every major U.S. public company. That’s led to pressure from politicians and activists who’d like to see BlackRock wield its influence for the greater good. It’s also prodding the New York-based firm to take ever greater care of its own reputation, said Kyle Sanders, an analyst at Edward Jones.“They’re at the forefront of conversations on ethical behavior and good management,” he said.It isn’t just a BlackRock issue. The MeToo era, kicked off by the allegations against movie producer Harvey Weinstein in 2017, has put the behavior of executives under a spotlight globally. Last month, McDonald’s Corp. removed its CEO over a relationship with a colleague, following a similar move by Intel Corp. in 2018.Fink’s memo portrayed the misconduct in grave terms.“It is deeply disappointing that two senior executives have departed the firm in the same year because of their personal conduct,” Fink and Kapito, two of the firm’s co-founders, wrote Thursday in announcing Wiseman’s exit. “This is not who BlackRock is. This is not our culture.”Rising StarThe departures stunned employees. Wiseman was seen as a rising star upon joining BlackRock in 2016. He was one of few people on the global executive committee whose career featured investing experience.Wiseman, 49, was also the only one of the group seen as potential Fink successors who’d previously been a CEO, running the Canada Pension Plan Investment Board for four years. At BlackRock he led the $290 billion active equities business and chaired its alternative investment division -- two areas where the firm is making a concerted effort to grow. His wife, Marcia Moffat, is BlackRock’s Canada country head.Day-to-day operations of the alternatives business will remain under the oversight of global head Edwin Conway and Jim Barry, its chief investment officer.The reasons for Smith’s departure were less clear. Fink and Kapito said only at the time that Smith “failed to adhere to company policy,” and BlackRock has declined to comment further.\--With assistance from Melissa Karsh.To contact the reporter on this story: Annie Massa in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Sam Mamudi at email@example.com, Alan Goldstein, David ScheerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Stephen Poloz, who resisted this year’s global rush to cut interest rates, won’t seek a second term at the helm of the Bank of Canada when his mandate ends in June.Poloz informed the central bank’s board of directors and Finance Minister Bill Morneau of his decision, according to a statement Friday from the bank.“It has been a privilege to serve as the ninth Governor of the Bank of Canada,” Poloz, 64, said in the statement posted to the bank’s website. He called his job at the bank, which began in 2013, “the most fulfilling of my long career.”The governor is preparing to leave the central bank with its 1.75% benchmark interest rate among the highest in advanced economies. Poloz -- who was among the few central bankers to raise interest rates in 2017 and 2018 as the nation’s economy began to fully recover from the last recession -- has been reluctant to reverse course, citing a relatively robust expansion and concerns that lower borrowing costs could fuel the nation’s already high household debt levels.“The issue of course is we’re at a very delicate point in time for the Canadian economy,” Brian DePratto, senior economist at Toronto-Dominion Bank said by phone. “The Bank of Canada is balancing growth concerns versus financial stability concerns. Certainly they’ve been emphasizing the latter quite a bit in my view in the recent communication.”Since Poloz came to power, Canadian household debt has increased by more than half a trillion Canadian dollars and remains near record high levels as a share of disposable income, which will almost certainly act as a millstone for growth for years to come. Bank of Canada officials cited the nation’s economic resiliency in the face of global uncertainty when they defended their decision this week not to follow the Federal Reserve in cutting rates.Though Poloz wasn’t expected to stay for a second term, he had indicated it was an option. His decision to step down means replacing him becomes one of the first orders of business for Prime Minister Justin Trudeau, whose Liberal Party won a second term in government after a divisive election in October.Early front-runners include the governor’s chief deputy, Carolyn Wilkins, who would be the first woman to take the job. Wilkins would offer the smoothest transition, particularly given how Poloz has elevated her role of Senior Deputy Governor under his watch to one that is more prominent than usual for the job.Wilkins, 55, oversees the central bank’s strategic planning and economic research, is involved in high-level Group of 20 and Financial Stability Board meetings, and is overseeing the review of the central bank’s inflation mandate, which will be renewed in 2021. Wilkins also fills in for Poloz once a year as chair of the Governing Council -- the group of policy makers that decides on interest rates.Jean Boivin, the head of BlackRock Inc.’s research unit, is also being touted as a stronger contender. He was considered an economic whiz kid when Bank of England Governor Mark Carney, then Bank of Canada governor, recruited him from academia as an adviser a decade ago. Boivin, currently based in London, would be the first francophone to run the central bank.Another potential successor is Tiff Macklem, dean of the University of Toronto’s Rotman School of Management, who left the bank after a long tenure after he lost his bid for the top job at the central bank in 2013 to Poloz. Among other names circulating as potential candidates include Paul Beaudry, who joined the Bank of Canada earlier this year as deputy governor; Evan Siddall, head of Canada Mortgage and Housing Corp.; and Paul Rochon, the current deputy minister of finance.Poloz’s announcement comes amid a period of turnover atop the world’s major central banks. Christine Lagarde just replaced Mario Draghi as president of the European Central Bank, while Carney is set to step down from the Bank of England in January.Under Poloz’s watch, borrowing costs were kept near the lowest levels in the central bank’s eight-decade history. That ultimately kept the economy afloat long enough for one of the fastest increases in jobs and probably the largest accumulation of wealth in the nation’s history, as cheap money inflated the value of real estate and financial assets.By some measures, Poloz has been one of Canada’s most successful central bankers ever: the country is closer to a state of full employment and stable prices than at any time since the 1960s.But his efforts to return the economy to full health, where it’s not reliant on low interest rates, housing and debt, ultimately fell short as Canada grappled with the lingering effects of the last recession and wrestled with a litany of new headwinds including a once-in-a-generation collapse in commodity prices and the impacts of global trade tensions.\--With assistance from Cedric Sam.To contact the reporters on this story: Theophilos Argitis in Ottawa at firstname.lastname@example.org;Shelly Hagan in ottawa at email@example.comTo contact the editors responsible for this story: Theophilos Argitis at firstname.lastname@example.org, Chris Fournier, Stephen WicaryFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Global asset managers are embracing China’s invitation to do more business in one of the world’s fastest-growing financial markets.At least six firms, including BlackRock Inc. and Vanguard Group Inc., have told regulators they intend to apply for fully-foreign-owned mutual fund licenses, people familiar with the matter said. In October, the China Securities Regulatory Commission said overseas institutions can apply for total control of onshore ventures starting in 2020: applications for futures firms begin Jan. 1; fund management businesses start April 1.Fidelity International, Van Eck Associates Corp., Neuberger Berman Group LLC and Schroders Plc have also held talks with regulators, the people said, asking not to be identified because the discussions are private.Fidelity said in a statement that the company is “actively preparing” to apply for a mutual fund license at a proper time. Neuberger Berman and Vanguard declined to comment. BlackRock, Van Eck and Schroders didn’t immediately reply to requests for comment.The prospect of unshackled access to Chinese households’ 90 trillion yuan ($12.8 trillion) of investable assets is luring the world’s biggest money managers even as China’s economy slows and its stock market fluctuates amid a trade war with the U.S. China’s mutual fund market, or mass retail market, has ballooned more than sixfold since 2011 to almost 14 trillion yuan.BlackRock Chief Executive Officer Larry Fink said in April he’s seeking to make the firm one of China’s leading asset managers as it expands outside the U.S., citing the potential for organic growth as the nation opens up its financial markets.Wealthy ClientsThe company, which owns a minority stake in a fund management joint venture with Bank of China Ltd., launched its first onshore private fund to qualified institutions and high-net-worth individuals last year, after winning a private funds license in 2017.Vanguard, which doesn’t have onshore operations, sees China as the only place where it could potentially build another $5 trillion of assets under management in future, Asia CEO Charles Lin told the Chinese-language Securities Times in July.Foreign firms have formed 44 fund management joint ventures with Chinese partners, all holding stakes smaller than 50% except JPMorgan Chase & Co., which earlier this year boosted its ownership above that level pending regulatory approval. Twenty-two global money managers, including Fidelity and Neuberger Berman, have also started private fund businesses in China over the past few years.To contact Bloomberg News staff for this story: Haze Fan in Beijing at email@example.com;Zhang Dingmin in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Katrina Nicholas at email@example.com;Emma O'Brien at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Saudi Aramco IPO was supposed to be a cornerstone of Crown Prince Mohammed bin Salman's ambitious plan to open the gates to foreign investment in the kingdom. The state oil giant confirmed on Thursday that its initial public offering would be the biggest in history, raising $25.6 billion. The offering will surpass Alibaba's 2014 New York flotation and value Aramco at $1.7 trillion - still short of the prince's $2 trillion goal.
for its active and index tracker funds, arguing that “more work needs to be done to ensure investors understand the impact of costs on investment returns”. Its senior investment planner, James Norton, even did that work. If the investor’s all-in costs are 2 per cent — which many wealth managers charge, and some ask for more — the sum will grow to £210,000 after 30 years.
One scoop to start: CVC Capital Partners has held talks with Fifa and Real Madrid about funding the creation of ambitious new global football tournaments that will challenge the sport’s most popular leagues. If you’ve spent winters in Aspen or Chamonix, you’re likely to have seen a lot of skiers coming down the slopes kitted out in Moncler. The man behind the luxury skiing brand is Remo Ruffini, below, an Italian mogul who is the creative brains behind puffer jackets that can set you back thousands of dollars.
The programme, known as the Country Partnership Framework, is designed to help Beijing fund green investments, encourage market-oriented reforms and promote early childhood development and healthcare initiatives. There is also a growing sense within the Trump administration, and on Capitol Hill, that China should no longer be treated as a developing economy.
(Bloomberg) -- BlackRock Inc. fired a top official over a consensual affair, the firm’s second high-profile dismissal this year over misconduct, as Chief Executive Officer Larry Fink cracks down on the behavior of his senior lieutenants.Mark Wiseman, global head of active equities and viewed as a potential successor to Fink, was terminated for violating the company’s policy on work relationships, according to a memo that Fink and President Rob Kapito sent to staff on Thursday. Global head of human resources Jeff Smith was dismissed in a similar way in July for breaking company rules.The dramatic nature of the departures shows how misconduct is being scrutinized and penalized at Wall Street firms in today’s environment. They also underscore Fink’s willingness to make an example of even the top leaders at the world’s largest asset manager.“I definitely think there’s a culture shift,” said Nancy Erika Smith, a lawyer whose clients have sued Wall Street firms for harassment and discrimination.The colleague involved in the affair reported to Wiseman, according to a person familiar with the matter. The Globe and Mail earlier reported that the person was his subordinate.Wiseman had been steadily gaining power at the firm since joining in 2016. He was chair of BlackRock Alternative Investors, in addition to his role at the helm of the active equities business. He was in a group of about seven contenders widely thought to be in the running to replace Fink. His wife, Marcia Moffat, is BlackRock’s Canada country head.Jeff Smith, the firm’s former global head of human resources, left after failing to adhere to company policy, Fink and Kapito announced in a memo in July, without giving more details. Both Smith and Wiseman were on BlackRock’s global executive committee.“This is not who BlackRock is,” Fink and Kapito wrote in a memo Thursday on Wiseman. “This is not our culture. We expect every employee to uphold the highest standards of behavior. This is especially critical for our senior leaders.”Companies worldwide are facing increased scrutiny over the behavior of top executives. The metoo era ushered in by the allegations against movie mogul Harvey Weinstein helped create a zero-tolerance policy for behavior that would have remained hush-hush in the past -- or handled internally. Last month, McDonald’s Corp.’s CEO Steve Easterbrook left the company because of a relationship with a colleague. In June 2018, Intel Corp. removed Brian Krzanich as CEO after the chipmaker learned he had a consensual relationship with an employee.The issue with Wiseman had no impact on any portfolios or client activities, Fink and Kapito said in the memo Thursday. The active equities business that Wiseman oversaw had about $290 billion in assets at the end of June.“I regret my mistake and I accept responsibility,” Wiseman said in a separate memo.Alternative investments has been a major focus for BlackRock, which manages a total of roughly $7 trillion, as it looks to branch beyond indexed products like exchange-traded funds.Speculation about successors to Fink, who turned 67 this year, has increased as investors and analysts look to the company’s future. Fink addressed his strategy over cultivating a select group of proteges in an interview with Bloomberg Markets magazine in 2017, when he said that when he leaves the company he does not expect to stay on as chairman.Wiseman, who has a law degree as well as an MBA, once served as a clerk to Canadian Supreme Court Justice Beverley McLachlin, and spent part of his career in law.He joined the Canada Pension Plan Investment Board in 2005 and was named CEO in 2012. His tenure at Canada’s biggest pension saw it open offices and pursue investments abroad, particularly in South America and Asia.(Updates with reporting line in fifth paragraph)\--With assistance from Paula Sambo, Max Abelson and Josh Friedman.To contact the reporter on this story: Annie Massa in New York at email@example.comTo contact the editors responsible for this story: Sam Mamudi at firstname.lastname@example.org, Alan MirabellaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Mark Wiseman, who was seen by many as a likely heir to BlackRock Inc. Chief Executive Officer Larry Fink, is now out of a job. The details we have are scant. In a memo, Wiseman explained: “I am leaving BlackRock because in recent months I engaged in a consensual relationship with one of our colleagues without reporting it as required by BlackRock’s Relationships at Work Policy.”An additional wrinkle: This consensual relationship was also an extramarital affair. Wiseman is married to Marcia Moffat, head of BlackRock’s Canadian division.Coming on the heels of Steve Easterbrook’s ouster as CEO of McDonald’s Corp. for a consensual relationship with an employee, comparisons are bound to be made. But the two cases are different, and while a line back to the MeToo movement will inevitably be drawn, let’s be clear: Neither of these cases involve allegations of sexual harassment or assault.Both cases are about violating company policy – BlackRock’s rule that relationships must be disclosed, and the McDonald’s rule that no boss can date a subordinate, direct or indirect. Companies can’t let senior leaders get away with violating the rules they’re asking their employees to follow.The question we should be asking, then, is not whether workplace relationships are wrong, but whether HR edicts seeking to control them are a good idea.Such policies seem to have sprung up like mushrooms after the spring rain of MeToo. The problem is that that they seek to do away with the “harassment” part of sexual harassment by controlling the “sexual” part. That’s wrongheaded.In fact, the whole post-MeToo conversation has focused a little too much on sex. (I suppose it’s natural; we’re only human.) In the aftermath of that movement, I fielded somewhat panicked questions from men about whether it was OK to ask a cute co-worker out for coffee or compliment a colleague’s outfit. Such innocent overtures were never the problem.Yet in this overheated environment, corporate HR departments seem to have decided that the best way to protect their firms from liability, and perhaps clarify some matters for a few confused men, would be to draw a bright line: No sex with colleagues. Or: No sex with colleagues less powerful than you. Or: No sex with colleagues, or colleagues less powerful than you, unless you tell HR about it. (And what could have a more libido-deflating effect than imagining that particular meeting?)This all seems needlessly Victorian – and tough to implement besides. When exactly are you supposed to disclose your new paramour to HR? Do you need to ask your boss’s permission before you start flirting? Do you have the “Are we boyfriend and girlfriend?” conversation before or after the “Are we HR official?” chat?The fact is, Americans work long hours, and lots of us are obsessed with our jobs. The more time we spend at work, the less likely it is we’ll meet someone outside corporate HQ. Estimates vary, but a significant number of people meet their spouses at work.With work and sex both being fairly central parts of the human experience, it’s inevitable that they’ll occasionally overlap. And it’s really none of HR’s business, though I realize they always like to have a seat at the table.Moreover, as such assortative mating increases and two-career couples become more common, more companies see recruiting top talent as a double act rather than a solo show. In high-flying careers where relocation is the norm, it’s no longer unusual for organizations to recruit both members of a power couple.That development represents progress for women, who are still much more likely to be the trailing spouse. If HR departments seek to ban sex, I worry it will curtail this promising development.HR departments don’t need to ban sex (impossible) in order to ban harassment (imperative). They should focus less on prurient details and more on punitive tactics. Colleagues shouldn’t bully, coerce or browbeat each other, regardless of whether such behavior has a sexual undercurrent. Company policies that clearly delineate what constitutes harassment and protect employees would have a much better result than attempts to track their sex lives.To contact the author of this story: Sarah Green Carmichael at email@example.comTo contact the editor responsible for this story: Brooke Sample at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Green Carmichael is an editor with Bloomberg Opinion. She was previously managing editor of ideas and commentary at Barron’s, and an executive editor at Harvard Business Review, where she hosted the HBR Ideacast. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Mark Wiseman was terminated for failing to disclose a consensual romantic relationship with another BlackRock employee.
Blackrock Inc. has ousted Mark Wiseman for failing to disclose a romantic relationship with an employee, the Wall Street Journal reported Thursday, citing a person familiar with the matter. Wiseman, who was viewed as a potential successor to Blackrock's Chief Executive Lawrence Fink, breached the company's policy by engaging in the relationship, the paper reported. The executive and his wife Marcia Moffat, head of Blackrock's Canada office, were viewed as a married power couple at the asset manager. The relationship was with another employee. "I engaged in a consensual relationship with one of our colleagues without reporting it," Mr. Wiseman in a memo Thursday, according to the paper. "I regret my mistake and I accept responsibility for my actions." Wiseman came to Blackrock in 2016 from the Canada Pension Plan Investment Board. Blackrock shares were up 0.8% Thursday, and have gained 24% in 2019, matching the S&P 500's gains.
Wiseman, one of several people tipped as BlackRock Chief Executive Larry Fink's possible successors, is a former Canadian pension manager who ran active equities and served as chairman of the $7 trillion indexing behemoth's alternatives unit. "When the firm becomes aware of a breach of policy or conduct that is not in line with our values, we move quickly and decisively to address it," Fink and BlackRock President Rob Kapito said in the memo, which was reviewed by Reuters.
Wiseman, one of several people tipped as BlackRock Chief Executive Larry Fink's possible successors, is a former Canadian pension manager who ran active equities and served as chairman of BlackRock's alternatives unit. "When the firm becomes aware of a breach of policy or conduct that is not in line with our values, we move quickly and decisively to address it," CEO Fink and BlackRock President Rob Kapito said in the memo, which was reviewed by Reuters.
(Bloomberg Opinion) -- About a year ago to the day, the U.S. yield curve inverted for the first time during this business cycle. Sure, it wasn’t the part that has historically predicted future recessions, but it foreshadowed the more consequential inversion — the part of the curve from three months to 10 years — which happened in March and lasted for much of the rest of the year through mid-October.This wasn’t much of a shock to Wall Street. Even in December 2017, many strategists saw an inverted yield curve as largely inevitable, with short- and longer-dated maturities meeting somewhere between 2% and 2.5%. That’s just what happened. It was enough to spur the Federal Reserve into action. The central bank proceeded to slash its benchmark lending rate by 75 basis points in just three months. Now the curve looks positively normal again.“Inverted Yield Curve’s Recession Flag Already Looks So Last Year,” a recent Bloomberg News article declared. Indeed, the prospect of the curve steepening in 2020 is drawing money from BlackRock Inc. and Aviva Investors, among others, Liz Capo McCormick and John Ainger reported. Praveen Korapaty, chief global rates strategist at Goldman Sachs Group Inc., told them the spread between two- and 10-year yields will be wider in most sovereign debt markets. PGIM Fixed Income’s chief economist Nathan Sheets said “the global economy has skirted the recession threat.”Yet beneath that bravado, the fear of another bout of yield-curve inversion remains alive and well on Wall Street.John Briggs at NatWest Markets, for instance, predicts the curve from three months to 10 years (or two to 10 years) will invert again, possibly for a couple of months, because the Fed will resist cutting rates again after its 2019 “mid-cycle adjustment.” “I see the economy slowing to below trend growth, the market seeing it and recognizing the Fed needs to do more, especially with inflation low, but the Fed will be slow to respond,” he said in an email. Then there’s Societe Generale, which is calling for the U.S. economy to fall into a recession and for 10-year Treasury yields to end 2020 at 1.2%, which would be a record low. Even though the curve doesn’t invert in the bank’s quarter-end forecasts, it’s quite possible during a bond rally, according to Subadra Rajappa, SocGen’s head of U.S. rates strategy.“Over time, if the data weakens, the curve will likely bull flatten and possibly invert akin to what we saw in August,” she said. “If the data continue to deteriorate and the economy goes into a recession as per our expectations, then we expect the Fed to act swiftly to provide accommodation.”To be clear, another yield-curve inversion is by no means the consensus. The prevailing expectation is that the economy is in “a good place” (to borrow Fed Chair Jerome Powell’s line) and that Treasury yields will probably drift higher, particularly if the U.S. and China reach any kind of trade agreement. In that scenario, central bankers will be just fine leaving monetary policy where it is.Bank of America Corp.’s Mark Cabana summed up the bond market’s base case at the bank’s year-ahead conference in Manhattan: There will probably be no breakout higher in U.S. economic growth (capping long-term yields) but also no need for the Fed to cut aggressively (propping up short-term yields). That should leave the curve range-bound in 2020.That range, though, is not all that far from zero. Ten-year Treasury yields are now 20 basis points higher than those on two-year notes, and 22 basis points more than three-month bills. At the end of 2018, those spreads were nearly the same — 19 basis points and 31 basis points, respectively. That is to say, it’s not much of a stretch to envision the curve flattening in a hurry if anxious bond traders clash with a patient Fed.For now, traders seem to be pinning their hopes on resilient American consumers powering the global economy, using evidence of strong holiday shopping numbers to back their thesis. My colleague Karl Smith isn’t so sure that’s the best strategy, given that the spending is actually weakening relative to 2018, plus it usually serves as a lagging indicator anyway. Markets are also on alert for any cracks in the U.S. labor market, which has been the bastion of this record-long recovery. November’s jobs numbers will be released Friday.As for the Fed, its interest-rate moves are a clunky way to fine-tune the world’s largest economy. But that’s not the case for addressing angst around the U.S. yield curve. If the central bank doesn’t like its shape, it has the policy tools to directly and immediately bend it back.It comes down to which scenario Fed officials consider a bigger risk in 2020: Allowing the Treasury curve to remain flat or inverted, or moving too quickly toward the lower bound of interest rates? Judging by dissents around the more recent decisions, this is very much an open question.To get another inversion, “you’d need a Fed that wants to hold policy constant through a period of economic weakness: front end remains anchored near current levels due to policy expectations, long end drops due to diminishing growth/inflation forecasts,” said Jon Hill at BMO Capital Markets. “Not impossible by any means.” An inversion would probably come in the first or second quarter of 2020, fellow BMO interest-rate strategist Ian Lyngen said, though that’s not his base case.That sounds about right. Fed officials seem satisfied with dropping rates by the same amount as their predecessors did during other mid-cycle adjustments. Now they want to wait and see how lower interest rates trickle into the economy, perhaps making them more entrenched over the next several months. It’s hard to say for sure, though, given that Treasury yields have behaved since the central bank’s last meeting. The market simply hasn’t tested the Fed’s resolve.Relative calm like that rarely lasts, particularly when one tweet on trade sends investors into a tizzy. The path forward is almost never as linear as year-ahead forecasts make it appear.The same is true for the yield curve. We might very well be past “peak inversion,” but ruling out another push below zero could be a premature wager.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
seen as a possible successor to chief executive Larry Fink, has been ousted from the world’s largest asset management company for failing to disclose a romantic relationship with a colleague. Mr Wiseman, who was tapped in 2016 to turn around the stockpicking business at BlackRock, is leaving the group following a “violation of the company’s relationships at work policy”, according to a BlackRock internal memo on Thursday.
Christopher Hohn, founder of TCI hedge fund, made his millions as a pugnacious activist. First he warned that he would unleash his activist muscle on companies including Airbus and Moody's if they did not improve their standards of disclosure — and action — over climate risks. Then he lambasted BlackRock for failing to impose equally tough disclosure requirements in their own investments.
BlackRock Real Assets has achieved a US$1 billion first close for its Global Renewable Power III fund (“GRP III”) with commitments from over 35 institutional investors in North America, Europe and Asia. The record first close reflects strong investor demand for renewable power assets that can potentially generate attractive risk adjusted returns with low correlation to the economic cycle, and that align with their long-term sustainability goals. GRP III is the third vintage of BlackRock’s global renewable power fund series.
(Bloomberg) -- Here’s the latest indicator of how hungry investors are to profit from clean energy: BlackRock just raised $1 billion for wind, solar and battery-storage projects.The world’s largest money manager received initial commitments from over 35 institutional investors in North America, Europe and Asia for its third global renewables fund. It’s the most BlackRock has raised yet for a clean-power fund’s first close.Renewable energy is becoming “one of the most active sectors in infrastructure,” said David Giordano, global head of BlackRock renewable power. It comes, he said, “as global power generation shifts from two-thirds fossil fuels to two-thirds renewables over the next few decades.”Clean-energy investments have surged as much of the world pushes to move beyond fossil fuels to fight climate change. Wind, solar and other forms of renewable power will attract about $322 billion annually through 2025, according to the International Energy Agency. That’s almost triple the $116 billion a year that will go into fossil-fuel plants.Read More: Clean Energy Investment Is Set to Hit $2.6 Trillion This DecadeBlackRock Real Assets aims to raise a total of $2.5 billion for the fund, Giordano said. Its renewable power group manages $5.5 billion in assets. Its first renewables fund raised $611 million and is full invested. The second one raised $1.65 billion and has committed nearly all of it.\--With assistance from Annie Massa.To contact the reporter on this story: Brian Eckhouse in New York at email@example.comTo contact the editors responsible for this story: Lynn Doan at firstname.lastname@example.org, Joe Ryan, Reg GaleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
An alleged accounting misstatement is a grave matter. Shares hardly moved on Wednesday after the Swiss stock exchange alleged “deficiencies” in GAM’s treatment of a 2016 acquisition. Recent woes include the suspension of a star fund manager, the gating of some funds, the departure of chief executive Alexander Friedman and a huge SFr59m ($58.8m) write-off of the overpriced Cantab deal.
Fidelity Investments on Tuesday named Bart Grenier, who was at the center of a tickets scandal at the mutual fund company more than a decade ago, to lead its nearly $3 trillion asset management division. Grenier will replace Steve Neff, who is retiring at the end of the first quarter of 2020. Grenier will run a division that has repositioned its most popular mutual funds, such as Contrafund, to be less expensive when held in corporate 401(k) plans, to counter an industry-wide problem of heavy withdrawals from actively managed funds.
(Bloomberg Opinion) -- The financial community has spent most of the past decade or so coping with the aftershocks of the global economic crisis. In the coming years, it’s likely to find most of its attention consumed by the need to tackle a far more serious threat — the climate emergency posing a clear and present danger that imperils more than just money.As envoys from almost 200 nations corralled by the United Nations meet in Madrid to discuss the climate crisis, a billionaire hedge fund activist has weighed in on the need for companies to come clean about their contributions to global warming, and for investors to use their financial firepower to demand action to combat the climate crisis.QuicktakeWhy Climate Terms MatterChristopher Hohn accused his fellow asset managers of having an “appalling” voting record on resolutions that challenge companies to do better environmentally. “Major asset managers such as BlackRock have been shown to be full of greenwash,” Hohn said, according to the Financial Times.Hohn runs TCI Fund Management Ltd., which manages more than $30 billion. The London-based firm wrote to companies including Airbus SE, Charter Communications Inc. and Moody’s Corp., threatening to divest its holdings if they don’t improve their greenhouse gas emissions reporting.Hohn has already put his money where his mouth is now going. His personal charity, the Children’s Investment Fund Foundation, donates about $150 million a year to organizations involved in the climate crisis, according to the FT. In October, he gave 50,000 pounds ($64,525) to Extinction Rebellion, the group’s biggest ever individual contribution. “I made the donation because humanity is aggressively destroying the world through climate change and there is an urgent need for us all to wake up to this fact,” the FT reported him as saying.One issue facing investors trying to align their portfolios with more principled strategies is the sheer proliferation of firms claiming to be able to rank companies based on their environment, social and governance performances. Sustainable Market Strategies reckons there are more than 100 data providers competing to compile and sell ESG data. (Bloomberg LP, the parent of Bloomberg News, provides ESG data, analytics and indexes.)“The multiplication of ESG data providers and scoring methodologies is making it more difficult for ESG-minded investors to actually find value in ESG ratings,” the research firm said in a report published last week. “ESG is still a jungle, and ESG scores — with all their biases — still lack price prediction power.”The report cites research by MIT Sloan School of Management that found ESG scores from different providers have a correlation of just 61%, compared with the 99% tracking found across credit ratings. “The ambiguity around ESG ratings is an impediment to prudent decision-making that would contribute to an environmentally sustainable and socially just economy,” the researchers said.Central banks are debating whether to add climate risk to their roster of responsibilities. Christine Lagarde, who recently became president of the European Central Bank, has said central banks should prioritize their role in mitigating the effects of global warming. Bank of England Governor Mark Carney, one of the most vocal central bankers on the financial risks posed by the climate crisis, will become a special envoy for climate action and finances for the United Nations, the bank just announced.And in Norway, the opposition Labor Party has called for the nation’s sovereign wealth fund, the world’s biggest with more than $1 trillion of assets, to take on a more political role. “Climate change will frame all politics,” party leader Jonas Gahr Store said last month.Climate activism is set to become more common in asset management in the coming years. Hohn’s intervention is a timely reminder that shareholders of all shapes and sizes need to engage with the companies they invest in, using their financial clout to compel executives to improve their environmental performance — for all of our sakes.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Three years after China opened its 2.5 trillion yuan ($355 billion) hedge fund market to global asset managers, the industry is discovering just how hard it is to win over the country’s investors.BlackRock Inc., Man Group Plc and 20 other foreign firms licensed to run Chinese hedge funds -- or private securities funds, as they’re known locally -- amassed around 5.8 billion yuan of assets as a group till August, according to data compiled by Shenzhen PaiPaiWang Investment & Management Co. The meager haul -- amounting to 0.2% of hedge fund assets in China -- reflects a host of challenges.International names like BlackRock don’t resonate much in China’s crowded market of close to 9,000 hedge funds, which has its own set of local stars. The world’s largest money manager is routinely confused with private-equity major Blackstone Group Inc. UBS Group AG’s shared Swiss roots with Credit Suisse Group AG mean their Chinese abbreviations are just one similar-meaning character apart, also prompting mix-ups.The limited name recognition is compounded by distribution hurdles. It all suggests a long wait before China turns into a meaningful source of profit for international money managers, which are desperate for new avenues of growth as clients in developed markets shift toward low-fee investments.“Building a brand in China is definitely a challenge for some foreign players,” said Hersh Gandhi, Man Group’s managing director for Asia Pacific ex-Japan. “We’ve been thoughtful about the strategies we want to run and the market segments we want to be in, and have sized our operations accordingly.”Man Group declined to comment on its assets and profitability in China. It, UBS and BlackRock oversee between 100 million yuan to 1 billion yuan each, according to ranges from PaiPaiWang, which tracks hedge funds in the country.Winton Group Ltd. has the biggest share of onshore money -- roughly 2.5 billion yuan -- after spending several years building an advisory business in China before receiving its private fund management approval in 2018.Excluding Winton puts the average for the rest at about 170 million yuan, 36% below the local mean, according to data from the Asset Management Association of China and Bloomberg calculations. Nine manage less than 100 million yuan, including Fullerton Fund Management Co. and Invesco, which both won licenses more than two years ago. Three, which have yet to launch a product or did so only recently, aren’t included in the calculation.Invesco declined to comment on investment flows, saying in an e-mailed statement that the company is “committed” to its mainland China business. Fullerton didn’t immediately reply to a request for comment.Fund raising difficulties are common, according to Yan Hong, director of the China Hedge Fund Research Center at the Shanghai Advanced Institute of Finance.Read more: In China’s Hedge Fund Industry, Global Managers Are a Tough SellForeign managers probably can’t make much money managing less than 1 billion yuan, given the operational and compliance costs, he said. But big global players with deep pockets may view such initial difficulties as manageable while they wait for longer-term opportunities.The task of building a presence was complicated by a rule change last year that blocked easy access to retail investors through securities firms and banks, forcing funds to go down a more costly path of chasing qualified individual investors.Local ChampionsAnother stumbling block is the extreme bets some local managers are willing to make to produce the stunning returns known to draw Chinese investors.Read more: Hedge Funds Chasing 400% Return Show Risk in China’s Wild MarketChina’s five-year champion among private stock funds -- Shanghai Panyao Asset Management Ltd. -- boasts a 515% cumulative return (the No. 2 fund is up 494%), according to PaiPaiWang. The top 10 performers among the largest local players had an average return of 37% in the first 10 months of 2019.While comparable data for foreign funds isn’t available, BlackRock’s first product returned about 10.3% as of Nov. 15 since its inception in May 2018, a person familiar with the matter said, asking not to be identified because the fund can’t be promoted to investors other than institutions or qualified clients. That compares to an 8.6% decline in the Shanghai Composite Index during the period.The company didn’t respond to a request for comment on its assets under management in China, or its products’ returns.Wang Linggang, who was BlackRock’s China compliance officer from 2017 until earlier this year, said foreign funds “have to accept” the local common practice of ceding part of management fees to distribution channels to ensure sales. They also need to follow the stricter anti-money laundering and anti-terrorism requirements of their home jurisdictions, whose tougher criteria may cost them clients, he wrote in an Aug. 13 article on the Wechat account of consultancy Financial Regulation & Law.Return ExpectationsTo be sure, the reputation global managers have for being more stable and disciplined is starting to attract high-net-worth clients, particularly those wary of irregularities and performance volatility among local funds.UBS, which entered China in the 1990s and is among the largest foreign players in this space, launched its fifth product in July -- a fund of hedge funds offering, where investors can put money into products managed by both local and foreign hedge funds in China.The private funds unit has tapped into UBS’s existing distribution channels and leverages its wealth management clients, according to Adrian Chen, general manager of UBS Asset Management (Shanghai) Ltd. “The client base available now in China already presents us with a big market,” he said.Kevin Wu, who works in Shanghai’s financial services industry, plowed 1 million yuan into a BlackRock product in August last year, diversifying his portfolio to try out a global player with a relatively low fee.The investment has so far yielded about 15% after fees, beating local stock indexes but trailing returns of some of Wu’s own share holdings in companies like Ping An Insurance (Group) Co. and Jiangsu Hengrui Medicine Co., both of which jumped at least 40% over the period.“It depends on your expectations,” the 42-year-old said by phone. “As long as they can yield around 12% a year, I can totally accept that.”High returns remain a draw among most though, prompting a constant churn and defeating regulatory efforts to encourage longer-term horizons. China’s hedge fund investors hold for an average of six months compared with around four years globally, estimates from PaiPaiWang and Preqin Ltd. show.Patience PaysThe “velocity of money in and out” is high even by retail standards, said Man Group’s Gandhi. “Foreign players need to accept this as part of the local landscape.”The foreign options available are also expanding as more funds are drawn in by the roughly 60 trillion yuan of investable assets China’s high-net-worth individuals hold. Many are also looking ahead as the Asian nation looks to unshackle its 14 trillion yuan mutual funds industry.Five overseas companies have made inquiries with Fangda Partners about hiring the law firm to apply for a private securities fund management license, according to partner Ren Zhiyi, who has represented Bridgewater Associates LP in China. LLinks Law Offices, which advised BlackRock, has about the same number of clients making preparations, partner Sandra Lv said.Read more on the overhaul to regulations in China’s private funds market here“This is a huge market with a lot of potential,” said Natasha Xie, a Shanghai-based partner with JunHe LLP, who says the number of registered foreign hedge funds may reach around 30 by the end of 2020.All three law firms declined to identify individual clients.Eastspring Investments, Prudential Plc’s asset management arm, registered as a private fund last year and is focusing on establishing a track record with its first product launched in April, said Bernard Teo, the head of corporate strategy. It took more than six months of interviewing for the firm to hire a local fund manager with the right mix of performance and risk controls, he said.Teo may need to brave the industry’s talent crunch again as he weighs adding local multi-asset and quantitative teams. “You certainly need to have the patience for the long term,” he said.(Adds comment from former BlackRock executive in 17th paragraph.)\--With assistance from Nishant Kumar, Evelyn Yu and Jun Luo.To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at email@example.comTo contact the editors responsible for this story: Katrina Nicholas at firstname.lastname@example.org, Candice ZachariahsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.