BlackRock, the world’s largest asset manager, has incurred a loss of about $17 billion in its holdings of Russian securities due to… attack on ukraine.
The company said customers owned more than $18.2 billion in Russian assets at the end of January, but shuttered markets and global sanctions imposed after Russian President Vladimir Putin’s invasion of Ukraine made the vast majority unsalable, prompting BlackRock to sharply reduce it.
The company suspended all purchases of Russian assets on February 28 and disclosed at the time that its holdings related to the country had fallen to less than 0.01 percent of assets under management. A BlackRock spokesperson said the total value was about $1 billion on February 28, when markets were virtually frozen, and the change was due to cuts, not asset sales.
The massive destruction of value reflects both the size of BlackRock — it has more than $10 trillion in assets under management — and the damage that Russia’s invasion of Ukraine has inflicted on the broader financial system.
Other big asset managers are also forced to jot billions of dollars into the show. pimcoFor example, it held at least $1.5 billion in sovereign debt and about $1.1 billion in bets on Russia via the prewar credit default swap market. Janus Henderson, Ashmore and Western Assets have also been exposed to Russian debt, According to Morningstar.
US banks Goldman Sachs and JPMorgan Announcing plans on Thursday To withdraw their business from Russia, saying that they are acting in accordance with the instructions of the government.
Larry Fink, CEO of BlackRock, said in a statement: LinkedIn post Following the broad write-offs indicating that “this was a highly complex and liquid situation, BlackRock will continue to actively consult with regulators, index providers and other market participants to help ensure that our clients are able to exit their positions in Russian securities, whenever and wherever regulatory and market conditions permit.” “.
BlackRock declined to give details of its Russian securities or detail exactly which funds suffered losses.
But the asset manager reduced the value of the largest exchange-traded fund in Russia, eros, from about $600 million at the end of last year to a total value of just under $1 million. It has suspended trading and eliminated management fees on all Russian ETFs as well as the Emerging Europe Fund that was highly exposed to Russia. This fund had a net asset value of 622 million euros At the end of January, but it is marked with 269 million euros.
If tensions and sanctions ease, Russian securities could start trading more freely again and regain some of their value. In this scenario, BlackRock’s money and customers can benefit as prices recover.
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