BlackRock Raids Quant Equity Managers for New Equity Group

BlackRock, traditionally known for its institutional fixed-income products, said its new equity team would be led by David Byrket and Frederick Herrmann. Byrket and Hermann had managed large-cap equity investments at fund boutique Weiss, Peck & Greer (WPG), Dow Jones reported. BlackRock didn’t disclose the financial terms of the arrangement.

Analysts told Dow Jones that the move is in line with BlackRock’s long-term strategy of diversifying its portfolio by beefing up its equity capability. Fixed-income and money market products represented more than 90% of the company’s overall assets under management of $273 billion at the end of last year.

Dow Jones said the ability to woo institutional investors with high-quality equity products is particularly important for BlackRock right now. Analysts expect many institutional investors to rebalance by plowing money that had been in a fixed-income position into their equity portfolios depleted by the bear market.

BlackRock’s fixed-income focus has allowed the company to escape much of the financial devastation suffered by investment houses with large equity holdings. That enabled BlackRock to boost revenue and profits and placed it in a position where it can acquire operations of other companies hurt by the market slump.