Morgan Stanley chief John Mack’s rebuilding effort may bring top-shelf money manager BlackRock under the mammoth investment bank’s roof.
The possible deal, first reported yesterday by CNBC, would be Mack’s biggest move since he replaced the embattled Phil Purcell five months ago, and addresses concerns over lagging performance in Morgan’s asset management unit.
Investors cheered rumors of the deal, sending shares of BlackRock up $7.65, or almost 8 percent, to $127. Morgan shares slipped $1.50 to $57.85.
Morgan’s asset management revenues last quarter were $890 million, although $165 million of that was a one-time gain from a private-equity investment.
On Thursday, BlackRock reported another solid quarter. Net income was up 46 percent to $72.9 million, or $1.09 a share. Revenue nearly doubled to $369 million.
By contrast, Morgan acknowledged last quarter that it was continuing to experience redemptions from its asset-management unit.
A spokesman from Morgan declined to comment, as did a spokeswoman from BlackRock.