BlackRock Inc. and Bank of New York Mellon Corp. are competing to become the world’s biggest money manager as stock markets show signs of recovery. Each company is in talks to buy Barclays Plc.’s fund unit, whose $1.5 trillion in client assets ranks highest in the industry, people familiar with the matter said last week. Each covets Barclays Global Investors’ (BGI) exchanged-traded funds, quantitative index investments and securities-lending business, analysts said.
“This will change the landscape, whether Bank of New York or BlackRock gets it,” said Geoff Bobroff, president of Bobroff Consulting Inc., an East Greenwich, Rhode Island, firm that advises mutual-fund companies.
BGI, based in San Francisco, would vault BlackRock, the largest publicly traded money manager in the US, to $2.81 trillion in assets. Bank of New York Mellon, the world’s biggest custody bank, would rise to $2.38 trillion, surpassing firms including Fidelity Investments and Vanguard Group Inc. The New York-based companies would gain more customers outside of the US and put pressure on their main rivals—Pacific Investment Management Co. for BlackRock, and State Street Corp. for Bank of New York Mellon—to catch up.
Bob Doll, BlackRock’s vice chairman and chief investment officer for global equities, declined to comment on reports that his company is in talks to buy BGI. He expects the fund-management industry to consolidate because many companies are losing money or breaking even, he said, which presents an opportunity for BlackRock to grow its business.
“In a position of relative strength, for which we’re thankful, we’re having lots of conversations and getting educated,” Doll said to reporters in Singapore on Monday.
Kevin Heine, a spokesman for Bank of New York Mellon, declined to comment