NEW YORK -- PNC Bank Corp.'s decision to consolidate its money management units shows the growing power and influence of BlackRock Financial Management Inc. and its chairman and CEO, Laurence Fink.
Mr. Fink co-founded the company in 1988 with BlackRock President Ralph Schlosstein, and helped build the firm's assets under management from zero to $55 billion. PNC bought BlackRock three years ago.
By putting its other four money management firms under the wing of its most successful one, PNC executives are hoping BlackRock will help the other firms grow.
"It would be beneficial to the whole organization to have one name and the momentum of BlackRock," Mr. Fink said.
All PNC investment management units will use the BlackRock name. The firms will keep their current staffs and locations.
The bank's asset management division has changed its name to BlackRock Inc., and the bank's $15 billion Compass Capital Funds mutual fund group has been renamed BlackRock Funds.
The move almost doubles BlackRock's total assets under management to $108 billion. It also expands the active fixed-income manager's product line to include active U.S. and international equities as well as money market funds.
With the combination, the other four PNC units will gain access to BlackRock's proprietary risk management technology, and allow them to leverage relationships with consultants and possibly cross-market, BlackRock officials said.
New York-based BlackRock actually has overseen more than $90 billion for the last year, because it was informally in charge of PNC's second-largest manager, PNC Institutional Management Corp. PNC Institutional manages about $42 billion in money market investments; most of it is not tax exempt.
BlackRock's assets have grown 24% annually over the last five years, Mr. Fink said. In recent years, about 80% of annual asset growth has been due to institutional clients, Mr. Fink said.
Executives say growth has been slower in PNC's three active equity units, and folding them into BlackRock should help. The three are Provident Capital Management Inc., PNC Equity Advisors Co. and CastleInternational Asset Management Ltd.
Provident and PNC Equity will become a single equity unit for organizational purposes, although their styles are different. Both are housed in the same building in Philadelphia.
Provident is an active value equity manager with $6 billion in assets under management; it was created in 1979 by Provident National Bank, which was acquired by PNC.
PNC Equity is an active U.S. growth manager with about $3 billion in assets, mostly taxable.
CastleInternational Asset Management Ltd. is an active international equity manager in Edinburgh, Scotland, with about $2 billion in assets under management.