PEOPLE: PNC BETTING FUTURE OF ITS FUNDS ON A SUPERB YEAR AT BLACKROCK

PNC Bank Corp.’s decision to consolidate its money management units shows the growing power and influence of BlackRock Financial Management Inc. and its chairman and CEO, Laurence Fink.

Mr. Fink founded the New York company in 1988 with BlackRock president Ralph Schlosstein, and helped build the company’s assets under management from zero to $55 billion. The Pittsburgh bank bought BlackRock three years ago.

By putting its other four money management firms under the wing of its most successful one, executives of PNC are hoping BlackRock will help the other firms grow.

blackrock Momentum

“It would be beneficial to the whole organization to have one name and the momentum of BlackRock,” Mr. Fink says.

All PNC investment management units will use the BlackRock name. The firms will keep their current staffs and locations.

The bank’s asset management division has changed its name to BlackRock Inc., and the bank’s $15 billion Compass Capital Funds mutual fund group has been renamed BlackRock Funds.

The move almost doubles BlackRock’s managed assets to $108 billion and expands the fixed-income manager’s line to include U.S. and international stocks as well as money market funds.

“Excellent move,” says Ken Hoffman, president of a bank and brokerage consultant, Optima Group Inc., in Fairfield, Conn.

“This shows the investment management industry that PNC means serious business. Aligning the five into one offers more flexibility and allows the entity to take advantage of the distribution opportunities.”

leveraging the rock

Dennis Gallant, a consultant at Cerulli Associates, a Boston research company, agrees. “It makes sense to provide some consolidation and leverage everything under one entity, especially the BlackRock name which probably has a little more play in the market place.”

BlackRock’s assets have grown 24% annually over the last five years, Mr. Fink says, with about 80% of it from institutional clients.

PNC executives say growth has been slo
wer in the three active equity units, and folding them into BlackRock should help. They are Provident Capital Management Inc., PNC Equity Advisors Co. and CastleInternational Asset Management Ltd.

Provident and PNC Equity will become a single unit, although their styles are different. Both are housed in the same building in Philadelphia.

Provident is an active-value equity manager with $6 billion under management; it was created in 1979 by Provident National Bank, a Philadelphia bank that was acquired by PNC.

PNC Equity is an active U.S. growth manager with $3 billion under management, mostly taxable.

CastleInternational manages $2 billion in international stocks from Edinburgh, Scotland.

Crain News Service