NEW YORK — The acquisition of State Street Research & Management Co. has been "mildly transformational" for BlackRock Inc., which Chairman and Chief Executive Officer Laurence D. Fink said is a perfect outcome for a firm looking to maintain strong growth without warping its corporate culture.
Critics called the SSRM acquisition — BlackRock's first — an "asset grab" that didn't go far enough in making the fixed-income giant a player in either the equity or mutual fund arenas in which BlackRock is looking to grow.
The Jan. 31 acquisition added just less than $50 billion in assets under management to BlackRock, giving it $391 billion as of March 31. It also lifted the firm's open-end mutual fund totals to $26 billion from $16.7 billion and its equity assets to $32.9 billion from $14.5 billion.
BlackRock executives, however, saw a deal that fit their preference for "incremental" over "earth-shaking" change, Mr. Fink said in an interview.
The acquisition of Boston-based SSR allowed BlackRock to bolster its own small-cap and midcap value and growth teams in Boston, while plugging a range of new equity capabilities — including large cap growth, asset allocation and both long-only and long-short energy products — into its existing platform, said Barbara Novick, managing director.
That combination has boosted the growth prospects of BlackRock's equity and mutual fund operations, executives at the firm said. "Most firms that grow solely by mergers and acquisitions fail … Incremental, organic growth, that's how you build and maintain a culture," Mr. Fink said.