BlackRock clients take $17bn hit as Russian assets plunge in value
The world’s largest asset manager BlackRock has marked a $17bn hit on its clients’ investments as Russian assets plunged in value following the invasion of Ukraine.
The firm’s clients held more than $18.2bn in Russian assets at the end of January but a Western sanction backlash and market volatility have left the firm unable to shift them, causing it to dramatically mark down their value, The Financial Times first reported.
The US investment giant, which has around $10tn assets under management (AUM), suspended all purchases of Russian assets on February 28 and said its holdings had fallen to less than 0.01 percent of its total AUM.
The plunge in value of the Russian holdings comes as a spate of other asset managers have written down their Russian investments.
US firm Pimco held at least $1.5bn of sovereign debt and around $1.1bn of bets on Russia via the credit-default swap market, the FT reported.
Janus Henderson, Ashmore and Western Assets also have exposure to Russian debt, data rom industry tracker Morningstar found.
A BlackRock spokesperson said: “Our clients’ exposure to Russian assets is primarily driven by index strategies, held across dozens of different portfolios. One month ago, our clients’ exposure to Russian securities represented 0.18% of our total AUM.
“Russian securities today represent less than 0.01% of our client assets. Any client impact would also depend on their initial asset allocation and the timing of their allocations to or away from this market during the period.”
The firm said it is consulting with regulators and index providers to “ensure clients can exit their positions in Russian securities, whenever and wherever regulatory and market conditions allow.”