Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

How dominant would BlackRock be if it bought Credit Suisse ETF arm?

How dominant would BlackRock be if it bought Credit Suisse ETF arm?

BlackRock’s iShares would control nearly three-quarters of assets in the European physical ETF market place if it bought Credit Suisse’s $17 billion ETF business, according to ETFGI.

Late last week it emerged that Credit Suisse’s European ETF business was up for sale, with BlackRock and State Street Global Advisors (SSgA) the two firms named in the bidding process, according to Reuters.

iShares already dominates market share in Europe with $125 billion in assets under management, accounting for 64.4% of all assets in physically-backed ETFs, ETFGI said.

Credit Suisse Asset Management follows, along with Zurich Cantonal Bank, with 8.7% each, and then UBS Global Asset Management, with 4.65%.

If iShares were to buy Credit Suisse’s ETF arm, its market share would rise from 64.4% to 73.1%.

Alternatively, if SSgA were to buy Credit Suisse’s business, SPDR’s market share of the physical market space would rise from 1.6% to 10.3%, taking it far beyond HSBC, which has a market share of 1.2%.

BlackRock is deemed to have the edge over SSgA, Citigroup analysts said, according to Bloomberg. The report from the investment bank noted BlackRock has a past of acquiring smaller asset managers and has greater financial flexibility, while State Street focuses more on returning capital to shareholders.

In a comment for Wealth Manager last month, BlackRock’s Joe Linhares, European head of iShares, said consolidation is ‘inevitable’ and that the firm is a proponent of it, as consolidation will lead to a greater pool of liquidity.

He said at the time: ‘We have a fractured industry with more than 40 providers, which means liquidity is fragmented. We think consolidation is good for investors over time, because it will lead to greater liquidity and more focus on a handful of fund groups. 

‘Although choice and competition is positive, do we really need 42 different providers? No, we need a handful of strong providers.’
 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter