BlackRock Inc., the largest asset manager globally, is holding discussions with Brazilian pension funds to expand its presence in the industry worth 2.9 trillion reals, which is equivalent to $510 billion.
As Bruno Barino, the current BlackRock Brazil country manager, mentioned in an interview, the company aims to manage money from local pension funds in Brazil, a market they have not tapped into yet but believe it is a natural progression given their presence in 43 countries. Barino, who previously led UBS Group AG’s multifamily office business in Brazil, joined BlackRock with the aim of changing this situation.
Since acquiring a set of exchange-traded funds and index mutual funds from Barclays Plc in 2009, BlackRock has been primarily focused on these types of products in Brazil, holding a 38% market share on the 46 billion reais in ETFs in the country. They are planning to introduce more ETFs and are already in the process of launching two new products.
Furthermore, BlackRock manages about $17 billion from Brazilian investors in foreign markets, while the entire foreign investment market from Brazil is estimated to be around $300 billion. However, Barino expressed that BlackRock cannot solely rely on offshore funds and ETFs for growth.
To expand their services, Barino is in discussion with pension funds and contemplating the recruitment of local fund managers in Brazil. Currently, he believes they can manage this with existing staff and utilize the Aladdin platform, which streamlines investment management processes and risk management tools.
Although BlackRock has a small portion of Brazil's $1.7 trillion investment industry, they are not reliant on market growth to increase their market share. Their services can assist investors in reducing costs, particularly pension funds that either have in-house fund managers or use third-party management services for parts of their portfolios.
Moreover, BlackRock’s offshore investment advisory service has gained popularity, especially among pension funds and institutional clients during times like 2020 when geographic diversification was crucial. Barino noted that they are contemplating introducing this advisory service to the local market.