BlackRock is celebrating 20 years of providing transition management solutions and continues to see strong demand from institutional investors seeking risk management, transparency in trading processes, and client-focused services.
BlackRock has transitioned more than £3.5 trillion of assets over the last 20 years and continues to work with its longest retained transition management client, the £20 billion Railways Pension Scheme. BlackRock was also the transition manager for a complex £11 billion LDI portfolio during last year’s landmark liquidation of the Royal Mail Pension Plan.
Transition management, which is the efficient implementation of significant portfolio changes for large asset owners, predominantly involved equities 20 years ago. However, as asset allocations have shifted, BlackRock increasingly transitions more fixed-income, emerging market and multi-asset portfolios for DC and DB pension schemes, insurers, reinsurers and sovereign wealth funds. In the last two years, BlackRock’s global transitions doubled the amount of fixed income assets handled as a proportion of its global transitions business to 33 per cent from 17 per cent.
Transition management is a core service for BlackRock’s institutional investor clients. It is popular with investors seeking robust risk management and transparency which is provided through BlackRock’s Aladdin investment management platform. This can also help clients reduce trading costs.
Lachlan French, Global Head of Transition Management at BlackRock, said: “Transition management is a core offering for BlackRock as an independent asset manager, and the power of our Aladdin platform means we can handle large pools of assets with extremely detailed views of risks and trading processes. We have many long-term relationships with large institutional investors and have added to the transition management team in 2013 to help these clients further.”
Chris Hitchen, CEO of RPMI Railpen which manages the Railways Pension Scheme and was BlackRock’s first transitions client, said: “RPMI Railpen has used transition managers to help manage portfolio change for many years. We value the long-term relationship with the BlackRock team and the level of transparency and accountability that they provide.”
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