BlackRock's advisory unit has been tasked by the Federal Deposit Insurance Corp. with selling the approximately $114 billion in holdings related to the collapse of Silicon Valley Bank and Signature Bank.
The FDIC said in a statement that BlackRock Financial Market Advisory had been retained to conduct portfolio sales related to the securities from the receiverships of SVB and Signature Bank. The portfolios are approximately $87 billion and $27 billion, respectively, and are primarily comprised of agency mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities.
The sales will be "gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions," the statement said.
Investment advisers support the FDIC as it conducts portfolio sales, a spokesperson for the FDIC said in an email. When securities are available for sale, they may be marketed through a selected investment adviser — in this case, BlackRock, the email added.
A BlackRock spokesman declined to comment.
SVB and Signature Bank collapsed last month, triggering volatility and uncertainty across financial markets.
BlackRock, which had $8.59 trillion in assets under management as of Dec. 31, established its financial markets advisory unit during the global financial crisis — in April 2008 — to provide support to governments, central banks and other entities. The business is separate and independent from the money management business.
The financial markets advisory unit was enlisted by the Federal Reserve in March 2020 as an investment manager and adviser for three programs aimed at supporting the U.S. economy in the midst of the COVID-19 pandemic.