amortgageman
03-29-2008, 08:53 AM
BlackRock Adds $30 Billion In Assets, Courtesy The Fed
March 27, 2008 | By Wayne Pinsent
The collapse and buyout of Bear Stearns (NYSE:BSC) is helping out one asset manager in a big way.
In the revised deal where JPMorgan (NYSE:JPM) upped its bid five-fold for Bear, BlackRock (NYSE:BLK) was chosen by The Fed to manage its $30 billion share of Bear's liabilities. The deal adds a sizable amount of assets to BlackRock, but also shows an incredible vote of confidence in the firm.
Toss Another $30 Billion on the Pile
One of the reasons the deal has been so good for JPMorgan is that The Fed is taking on $30 billion of the exposure from Bear's portfolio. The Fed tapped BlackRock to manage the portfolio, which works out great for BlackRock. This $30 billion is added to the company's already $1.4 trillion in assets, and it should bring in around $54 million per year in fees based on the average fees charged by the company. But this could be much higher due to the complexity of Bear's portfolio.
The New York Fed stated that BlackRock will manage the portfolio according to guidelines to "designed to minimize disruption to financial markets and maximize recovery value".
Vote Of Confidence:
This recent move by the fed is clearly a vote of confidence in BlackRock as the go to asset manager in times of crisis.
The company was also picked to manage the superfund created by Citigroup (NYSE:C), Bank of America (NYSE:BAC) and JPMorgan to take on the assets of troubled structured investment vehicles. The deal fell through because the fund was no longer needed, but the pick of BlackRock came with the blessing of the U.S. Treasury Department. This is just further proof of CEO Lawrence Fink has created the go-to asset management company.
The company has very strong risk controls and despite previously being eager to package mortgage obligations, BlackRock quickly moved away from them before the mess hit. This has left BlackRock relatively unscathed by the mortgage mess, and one of the few financial stocks to have gains since the summer. Overall the company is in great condition, and I would still recommend it as a long-term play.
The Bottom Line
BlackRock solidified its position as the go-to asset manager, when The Fed tapped it to manage the $30 billion in Bear Stearns assets. Its strength and risk control has helped BlackRock hold up unscathed, while most financials are licking their wounds. I think the stock is still a good long-term pick.
And then, when you search a little further, you find this:
By Wayne Pinsent
Ex-Countrywide execs forming mortgage firm
By MarketWatch
Last update: 2:42 a.m. EDT March 24, 2008Print E-mail RSS Disable Live Quotes
TEL AVIV (MarketWatch) -- A number of former Countrywide Financial Corp. executives are forming a firm to take advantage of the massive unwinding of the mortgage-securitization business, The Wall Street Journal reported.
Former CFC President Stanford Kurland and colleagues are forming Private National Mortgage Acceptance Co., or PennyMac, to buy not mortgage securities but rather whole mortgage loans, the Journal reported.
PennyMac plans to buy the mortgages cheaply, work with borrowers to restructure them, and then resell them at a profit as interest-earning mortgages, the paper reported.
The planned firm, a partnership with BlackRock
4:01pm 03/28/2008
and the Boston investment firm Highfields Capital Management, could draw criticism, the Journal reported.
That's because some investors and analysts say that the aggressive sales practices and lower standards of Countrywide, the Calabasas, Calif., mortgage lender, helped create the subprime-mortgage problems of which the new firm is taking advantage, the paper reported.
March 27, 2008 | By Wayne Pinsent
The collapse and buyout of Bear Stearns (NYSE:BSC) is helping out one asset manager in a big way.
In the revised deal where JPMorgan (NYSE:JPM) upped its bid five-fold for Bear, BlackRock (NYSE:BLK) was chosen by The Fed to manage its $30 billion share of Bear's liabilities. The deal adds a sizable amount of assets to BlackRock, but also shows an incredible vote of confidence in the firm.
Toss Another $30 Billion on the Pile
One of the reasons the deal has been so good for JPMorgan is that The Fed is taking on $30 billion of the exposure from Bear's portfolio. The Fed tapped BlackRock to manage the portfolio, which works out great for BlackRock. This $30 billion is added to the company's already $1.4 trillion in assets, and it should bring in around $54 million per year in fees based on the average fees charged by the company. But this could be much higher due to the complexity of Bear's portfolio.
The New York Fed stated that BlackRock will manage the portfolio according to guidelines to "designed to minimize disruption to financial markets and maximize recovery value".
Vote Of Confidence:
This recent move by the fed is clearly a vote of confidence in BlackRock as the go to asset manager in times of crisis.
The company was also picked to manage the superfund created by Citigroup (NYSE:C), Bank of America (NYSE:BAC) and JPMorgan to take on the assets of troubled structured investment vehicles. The deal fell through because the fund was no longer needed, but the pick of BlackRock came with the blessing of the U.S. Treasury Department. This is just further proof of CEO Lawrence Fink has created the go-to asset management company.
The company has very strong risk controls and despite previously being eager to package mortgage obligations, BlackRock quickly moved away from them before the mess hit. This has left BlackRock relatively unscathed by the mortgage mess, and one of the few financial stocks to have gains since the summer. Overall the company is in great condition, and I would still recommend it as a long-term play.
The Bottom Line
BlackRock solidified its position as the go-to asset manager, when The Fed tapped it to manage the $30 billion in Bear Stearns assets. Its strength and risk control has helped BlackRock hold up unscathed, while most financials are licking their wounds. I think the stock is still a good long-term pick.
And then, when you search a little further, you find this:
By Wayne Pinsent
Ex-Countrywide execs forming mortgage firm
By MarketWatch
Last update: 2:42 a.m. EDT March 24, 2008Print E-mail RSS Disable Live Quotes
TEL AVIV (MarketWatch) -- A number of former Countrywide Financial Corp. executives are forming a firm to take advantage of the massive unwinding of the mortgage-securitization business, The Wall Street Journal reported.
Former CFC President Stanford Kurland and colleagues are forming Private National Mortgage Acceptance Co., or PennyMac, to buy not mortgage securities but rather whole mortgage loans, the Journal reported.
PennyMac plans to buy the mortgages cheaply, work with borrowers to restructure them, and then resell them at a profit as interest-earning mortgages, the paper reported.
The planned firm, a partnership with BlackRock
4:01pm 03/28/2008
and the Boston investment firm Highfields Capital Management, could draw criticism, the Journal reported.
That's because some investors and analysts say that the aggressive sales practices and lower standards of Countrywide, the Calabasas, Calif., mortgage lender, helped create the subprime-mortgage problems of which the new firm is taking advantage, the paper reported.