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Terminations/Cost Cutting

BlackRock Axes Over 30, Revamps Active-Equity Group

March 29, 2017

BlackRock may be the world’s biggest money manager, but size doesn’t mean it’s immune from sluggish fund performance and investor withdrawals. Which led CEO Larry Fink to move forward with some major changes to BlackRock’s actively managed equities business. Mr. Fink now sees computer models and data science as the future of active-equity management.


On Tuesday, the firm announced that over 30 people were fired – including 5 of its 53 fundamental portfolio managers, and about $6 billion in funds were moved into cheaper funds which rely more on computers than on humans for stock-picking. Fees will be reduced by around 19% to 56% on the moved funds. The firm is also moving assets from active-equity funds to an income series that produces higher dividend yields.


On the flip side, the firm expects to increase spending on data-mining techniques, with an eye to improving investment performance. And, over the next 18 months, Mark Wiseman, who heads up BlackRock’s active equities operations, expects to hire about the same number of employees who were laid off – though with different pedigrees. BlackRock will be looking for people with deep research capabilities, technological and data analytics skills, and will put more emphasis on hiring in the emerging markets, especially Asia.