PNC Financial to Exit Full Investment in BlackRock

Q: What does ‘The $6.5 trillion asset manager’s rise is emblematic of how asset managers have gained ground on the biggest Wall Street banks’ imply?

A: It used to be that asset managers do not have ground. Similar sentences:

“PNC’s exit ends a chapter in which BlackRock was owned by several banks and opens a new era. The firm is no longer beholden to other banks and has itself dislodged some banks to become a central power on Wall Street in its own interest.”

Similar message is delivered in the second link: Fed has handed a critical new role to money managers, in particular, BlackRock and PIMCO.

(I think this is a good topic to look into)

Q: Why does government officials believe that money managers can be more impartial?

A: They believed that money-management firms, by not being in the business of arranging debt offerings or maintaining an inventory of bonds for clients, would be best positioned to be impartial.

Because money-management firms are not in business of arranging debt offerings or maintaining an inventory of bonds for clients, which wall street banks do, and therefore they are best positioned to be impartial.

Q: how does PNC benefit from its shares in Blackrock?

A: 1/A rich stream of dividends PNC has reaped 2/70-fold paper value gains ( and options to unlock the value of investment) 3/Selling stakes in BlackRock reduces some regulatory costs for PNC. 4/The noninterest income delivered by the BlackRock business segment has padded the banks’ earnings in past challenging lending environments and brought diverse revenue streams.

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Jun Gao

Jun Gao

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