Following the shift, State Street will continue to service about 15% of BlackRock's roughly $2.3 trillion in U.S. ETF assets, the spokeswoman confirmed. Citi will end up with the biggest slice of the business at 40%, according to a BlackRock news release. J.P. Morgan have 30% of assets and BNY Mellon, 15%.
BlackRock has long-standing relationships will all four providers, Derek Stein, senior managing director and global head of technology and operations, said in the release.
"The decision to diversify across these world-class financial institutions is based on our desire to create a robust operating model for servicing ETFs, which will help us scale the iShares franchise and mitigate concentration risk," Mr. Stein said.
The transition of U.S. iShares ETF assets to the new providers is expected to begin in the second half of 2022 and take about 18 months, the spokeswoman said.
State Street in a statement said that as was disclosed in its 10-K filing in February, BlackRock had previously issued an RFP for its U.S. iShares and Irish iShares assets.
"As part of their long-term strategy to diversify ETF service providers for these fund complexes as part of its fiduciary obligations to these funds, BlackRock will be transitioning some of the U.S. assets from State Street to three additional providers," State Street's statement said.
State Street will continue to have a "critical role" as a long-term partner to iShares and the firm, the statement said.
"Beyond ETFs, State Street continues to be a critical service provider to a diverse set of BlackRock funds," the statement said. "We service BlackRock's growing alternatives business across hedge and private markets, as well as mutual funds, liquid alternatives and index funds."
The RFP and due diligence process for iShares' Ireland-domiciled ETFs is continuing, and the outcome will be announced later, BlackRock's release said.