Blackrock Inc. (NYSE:BLK) is continuing its move to be more than just a profit making companyand using its power in the market to influence the way investment works today. The firm announced plans to introduce a new trading platform that will allow investors to invest in bonds without having to go through an investment bank.
The company released the information today and it was reported by the Bloomberg earlier today. The new system may be a sign of bigger things to come from the Wall Street company.
The move has the potential to change the structure of bond investment giving access to investors without having them necessarily be involved in an investment bank. The new system is starting off small, with just 46 clients involved.
The company said the move was made in order to reduce charges on investors and was part of a broader effort by the firm to streamline its investment platforms. If it is successful Blackrock would be able to reduce the fees it charges investors and so add more large investors to its portfolio.
The system will be available to those who use the company’s Aladdin investment system providing an alternative to electronic systems and investment banks.
The company holds $1.2 trillion in bond assets making this move a big one even by that company’s standards. The 46 clients who eill be given access to the platform firs are likely very large bond holders and probably make up a large chunk of the company’s holdings in the sector.
Recently the company’s CEO Laurence D. Fink said the company was planning to use its considerable power in the market to get behind issues it cared about and bring about a change using its strengths.
Today’s moves may be part of that strategy. Reducing the price of investments is good for clients, and good for Blackrock, but may also be effective in changing the way bond trading works if investors see it as successful. The initial clients offered the opportunity will be a testing ground that may allow others to get involved in the market.
If doing away with the need for certain types of institution in favor of everybody using Blackrock is the company’s new strategy then it will surely make many enemies on Wall Street. It is however an exciting time for Blackrock which became the world’s largest Asset manager after acquiring Barclays Global Investors in 2009.