In an attempt to reduce costs to clients, BlackRock is planning to set up its own global trading network – reported Bloomberg. Reportedly, Minder Cheng, global chief investment officer of equity and capital markets at BGI, is appointed to oversee the effort.
According to The Financial Times, the firm’s internal memo to senior executives states that “it plans to develop a new world-class global trading platform across the firm that will fully realise the cost efficiencies and trading opportunities across all asset classes as we become one of the largest trading operations in the world.” Reportedly, once the investment management firm wraps up the acquisition of Barclays Global Investors, it will have around $3,000 billion in assets under management.
As per the personnel familiar with the plan, BlackRock does not want to charge any fees from its clients, when they sell a security to others, even though it can cross those trades internally without going through Wall Street. It has been reported that the plan will be introduced in stocks first, where pricing is considered to be more transparent than in fixed income.
Geoff Bobroff, an independent fund consultant in East Greenwich, Connecticut, in an interview to Bloomberg, said: “In a potentially low-return environment, if they can save a few basis points, they can enhance returns for investors. BlackRock as a firm is very technology oriented, and for them to start such a platform would make sense.”
