Size may not matter if the behemoth BlackRock can't hold onto Merrill Lynch customers. The Wall Street Journal reports that it may not be easy for BlackRock, which hitherto has relied on most of its business from big, institutional investors, to make a transition to retail investors, the bulk of the Merrill Lynch business coming its way. If history repeats itself, BlackRock may be in for a struggle, says The Journal.
Two years ago, BlackRock acquired State Street Research & Management Co., an institutional-cum-mutual-fund institution, but last year, BlackRock lost about $2.3 billion of the funds it was handling, with a large chunk coming from State Street's Aurora Fund, under new BR management. What's more, Merrill Lynch has also suffered through loss of some of its retail-investor business, though now it's bouncing back. Chief executive Stan O'Neal, however, told The WSJ Merrill Lynch has a long tradition of dealing with this class of investor and was confident BlackRock would be able to overcome these hurdles.