BlackRock Inc plans to raise about US$10 billion as part of a new business that would take direct stakes in companies, according to a person familiar with the matter.
The move marks a new strategy for the company that manages more than US$6 trillion for investors through publicly offered mutual funds and exchange-traded funds, many of which own broad swaths of the market.
A multibillion-dollar fund could put the world’s largest asset manager in more direct competition to own promising private companies with the likes of Berkshire Hathaway Inc’s Warren Buffett and private equity firms, including Blackstone Group LP, from which it was initially spun out.
The approach would likely be to take minority stakes in companies and hold them for a relatively long period of time, the person said.
BlackRock was not immediately available for comment. The company’s plan to raise about $US10 billion was first reported by the Wall Street Journal.
BlackRock Chief Executive Larry Fink has long pushed corporate executives to adjust their behavior to focus on generating long-term value for shareholders, rather than simply meeting short-term profit targets.
The person said the new effort is being chaired by Mark Wiseman, a top executive who the firm hired in 2016 from the Canada Pension Plan Investment Board. Wiseman’s first big move was to spearhead an effort to improve BlackRock’s ability to pick winning stocks in part by using technology to aid the process.
Day-to-day management of the new effort is being led by André Bourbonnais, the former chief executive officer of Canada’s Public Sector Pension Investment Board (PSP Investments), the person said.
Update: PSP Investments this week announced the forthcoming departure of André Bourbonnais. He is being replaced as president and CEO by Neil Cunningham.
(Reporting by Trevor Hunnicutt in New York and Mekhla Raina in Bengaluru; editing by Grant McCool)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo of Mark Wiseman courtesy of BlackRock Inc