BlackRock's iShares to buy Credit Suisse's ETF unit
By Thao Hua | January 10, 2013 12:16 pm
BlackRock (BLK) agreed to purchase Credit Suisse's exchange-traded-funds business, adding $17.6 billion in assets under management across 58 funds to the iShares ETF range. Financial terms were not disclosed.
The transaction will bring BlackRock's total ETF AUM in Europe, the Middle East and Africa to about $158 billion, based on estimates as of Dec. 31, according to the company.
“One of the most critical rationales for the transaction is that ( BlackRock) doesn't currently have a local product line in Switzerland to service the client base there,” Joe Linhares, managing director and head of iShares for EMEA, said in a telephone interview.
Switzerland is a key European market for potential growth in ETFs, Mr. Linhares said.
Credit Suisse's range of funds — which are dominated by ETFs investing in equities, fixed income and gold — will “help us to serve a broader set of clients even better,” Mr. Linhares added.
“We believe (the ETF industry) is entering an age of growth in Europe that's going to be significantly different than what's occurred in the last decade.” So far in January alone, BlackRock has recorded about $2 billion in net inflows into ETFs for the EMEA region.
“Clients are using ETFs more and more as they're putting money back to work,” Mr. Linhares said. In Europe, overall assets invested in all ETFs total about $375 billion, according to data provided by BlackRock.
Credit Suisse had announced plans to sell its ETF business in October 2012 as a broader strategy to offload some of its non-core assets. Pending regulatory approval, the deal is expected to close by June 30.