Invesco Ltd. is poised to give BlackRock Inc. a run for its money as the world's biggest asset manager, according to Don Putnam, managing partner of Grail Partners LLC.
Speaking at the Money Management Institute's fall conference in New York this morning, Mr. Putnam talked about how today “is the era of an operator” and that it's not enough for asset managers merely to push product.
Instead, firms have to be all things to all people, he said. “BlackRock has proved to us that it's possible to be in every product in every market,” Mr. Putnam said. “Right now, it's not a money manager; it's a global delivery system for products.”
With $3.35 trillion in assets under management as of Dec. 31, BlackRock offers exchange-traded funds and mutual funds, and offers active and passively managed products, he said. What's more, its performance across all categories is stellar. BlackRock acquired Barclays Global Investors last year, helping to add $2 trillion in assets under management.
Mr. Putnam anticipates that there will be increased consolidation in the asset management space as more firms attempt to become “operators” like BlackRock, he said. “The common wisdom that from an investment perspective, transactions in this industry are not a success is statistically not true,” he said. Out of 115 financial transactions in the last year, there have been only two debt refinancings and one collapse, he said.
The firm that is in the best position to go head-to-head with BlackRock is Invesco, Mr. Putnam told InvestmentNews after his presentation. “They have the most complete product line and a superior management team,” he said. Invesco bought Van Kampen Funds Inc. last year for $1.5 billion. The firm also offers ETFs through its Powershares subsidiary, which its parent, Amvescap PLC, bought in 2006.
Jessica Toonkel writes for InvestmentNews, a sister publication of Pensions & Investments.