The Asia-Pacific region has been the weak link in BlackRock Inc.'s global growth story in recent years, leading some market veterans to conclude the New York-based giant has yet to find a formula for success there.
In a Feb. 10 interview, Mark McCombe, BlackRock's Asia-Pacific chairman, conceded the company faced some serious headwinds when he took the helm two years ago in Hong Kong.
But, he said, progress in restructuring BlackRock's business since then has left the firm poised to grow strongly, even if that's not yet obvious from the numbers for the region found in BlackRock's financial reports.
Those numbers — for net flows, assets under management and revenue — offer little evidence that the world's biggest money manager, with $4.3 trillion in assets under management at the end of 2013, has been gaining traction in the region.
For 2012 and 2013, BlackRock reported combined net outflows of $75 billion from Asia-Pacific clients, even as the firm was enjoying inflows of more than $140 billion from clients in the Americas and more than $50 billion from clients in Europe, the Middle East and Africa.
(That tally included the loss of a single passive, $74 billion fixed-income mandate in Japan, which BlackRock Chairman and CEO Laurence D. Fink noted in an earnings call for the third quarter of 2012, was offering such low fees that it no longer made business sense for the firm to manage. Even without that loss, however, Asia-Pacific flows would have been largely flat at a time when investors in other major regions were throwing money at the firm — a pattern that prevailed in 2010 and 2011 as well.)
At the end of 2013, Asia-Pacific clients accounted for 8% of BlackRock's total assets under management, or less than $340 billion, down from more than 10% at the close of 2011 and 2010.