Letters to the Editor

The Nov. 27 Pensions & Investments carried a Page 1 article referencing BlackRock's former joint venture with Nomura Asset Management — Nomura BlackRock Asset Management.

While the article is correct in stating that our joint venture, NBAM, was dissolved following our merger with Merrill Lynch Investment Managers, the article ("Nomura BlackRock union crumbles: First U.S-Japanese venture dies over brokerage conflict") is grossly misleading and incorrect.

First, the joint venture was not dissolved because of a "brokerage conflict" between Merrill Lynch & Co. and Nomura Securities Co. Ltd., as the article states. In fact, that had nothing do to with the decision. Following BlackRock's merger with MLIM, we gained a larger, more direct, presence in Japan. In order to avoid confusion and overlap in that market, BlackRock and Nomura Asset Management together concluded that it made sense for BlackRock to acquire NAM's interest in NBAM and consolidate that business with the broader BlackRock business in Japan.

Second, the NBAM partnership was the first joint venture between a Japanese and a U.S. investment management firm and it enjoyed tremendous success since its inception in 1999. But it certainly did not "crumble" as your headline implies. There was a mutual understanding between the two companies resulting in an amicable end to the joint venture. Implying otherwise is unequivocally wrong.

Nomura Asset Management and BlackRock continue to work together on a number of different initiatives. We had worked together for several years before creating NBAM and will continue to do so in the future. BlackRock and the Nomura Group companies remain very important partners to one another.

Laurence D. Fink

chairman and chief executive officer

BlackRock Inc.

New York

The Nov. 27 Other Views commentary, "What's wrong with the 401(k) industry?" by Paul I. Kampner, contains the germ of an idea whose time has come, but that was the centerpiece of the 401(k) program of at least one major corporation in the 1980s.

I assisted NCR Corp. back then with the creation and communication of 401(k) plan asset allocation funds that made significant use of index funds. As I recall, participants were offered a series of such funds (at least five, as I remember) that were graded according to risk; in fact, something called a "risk-o-meter" that resembled an old-fashioned floor indicator for an elevator was used in communication materials to depict the expected risk of each fund.

At the time, the virtues of indexed vs. active management were not as widely discussed or understood as they are today, and certainly indexed products were still in their infancy. Mr. Kampner rightly points out the drawbacks of current lifecycle fund offerings, but his commentary sets the stage, I believe, for asset allocation funds and lifecycle funds that are made up predominantly of index funds.

As we continue to experience the lack of participant interest in becoming capable asset allocators/investors — no matter how many advice tools are put before them on the computer screen or in person — the thoughtful plan sponsor will want to consider this approach to 401(k) plan investments.

Tom Reicher

partner

Cooley Godward Kronish LLP

San Francisco