| NEW YORK, March 28
NEW YORK, March 28 BlackRock Inc on
Tuesday said it would dramatically recast a portion of its fund
management operations, conceding that the business of picking
stocks has grown increasingly competitive.
The world's largest asset manager said in a statement it
will rebrand, or adjust investment strategies or portfolio
management on about 11 percent of its $275 billion active stock
Among the changes, BlackRock is removing some seven
traditionalist "Fundamental" portfolio managers from their
current assignments, according to a source familiar with the
matter. It was not immediately clear how many additional jobs
would be affected by the changes.
As part of the changes, the company will cut fees on some
products that are being rebranded as an "Advantage" series of
lower-cost active funds. Planned fee cuts will slice about $30
million of BlackRock's revenue, and the company will take a $25
million charge this quarter to reflect severance and other
The company said it will also expand its investments in
data-mining techniques that it said can improve investment
performance. Other funds are being refocused to take
"high-conviction" bets on stocks.
Active stock managers in the United States have been smacked
with withdrawals in recent years as investors increasingly fled
to lower-cost products, including index-tracking ETFs, some of
which charge as little as $3 annually for every $10,000 they
manage, while the average charged by U.S. stock mutual fund
managers is $131, according to data for 2015 from the Investment
Company Institute trade group.
An industry bellwether, New York-based BlackRock also owns
one of the most prized businesses in asset management, its
iShares exchange-traded funds franchise.
(Reporting by Trevor Hunnicutt; Editing by James Dalgleish)