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Fund Spy

A Unique Money Manager With Unique Challenges

BlackRock's great scale comes with great responsibility.

Morningstar recently issued a new Stewardship Grade for BlackRock. The firm's overall grade--which considers corporate culture, fund board quality, fund manager incentives, fees, and regulatory history--is a C. What follows is Morningstar's analysis of the firm's corporate culture, for which BlackRock receives a B. This text, as well as analytical text on the other four Stewardship Grade criteria, is available to subscribers of Morningstar's software for advisors and institutions: Morningstar Advisor Workstation(SM), Morningstar Office(SM), and Morningstar Direct(SM).

There has never been a money management firm like BlackRock. In fewer than 30 years the former unit of private equity firm Blackstone has used acquisitions and operational savvy to become the largest asset manager in the world, with $4.6 trillion in assets as of Dec. 31, 2015, and style-, vehicle-, strategy-, asset-class-, and globe-spanning capabilities. Its scale, breadth, expertise, and ambitions place it at the epicenter of most financial industry trends and debates. Local and national governments, sovereign wealth funds, and other institutional investors seek its input and advice and often use its risk-management tools. Achieving such prominence and influence through multiple transformational mergers when one such deal often has been enough to trip up rivals is, in itself, enough to signal a positive and resilient corporate character.

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