BlackRock, the world’s largest asset manager, suffered a loss of around $17 billion due to continued chaos in the Russian market, the FT reported today. The news adds to a growing list of financial giants hit by Russia’s invasion of Ukraine, which saw the rouble plummet, the Moscow Stock Exchange shutter and a slew of funds suspend or close their doors.
BlackRock on Feb. 28 suspended the purchase of all Russian assets, with Russian holdings falling to around 0.01% of its assets under management worth around $1 billion. However, losses have increased sharply since then. Its largest Russian ETF, ERUS, saw its value drop from around $600 million to just $1 million in the last quarter.
Larry Fink, CEO of BlacRock, noted in a LinkedIn post last week that: “This situation has been very complex and fluid, and BlackRock will continue to actively consult with regulators, index providers and other market participants. to ensure that our clients can exit their positions in Russian securities, when and where regulatory and market conditions permit.
Other major players were also affected. On Thursday, JP Morgan and Goldman Sachs announced their withdrawal from the Russian market, saying they were doing so in accordance with regulatory requirements. However, Goldman was less hard hit, with exposure to Russian assets of just $650 million.
Citi is another bank affected by the crisis and is currently in the process of winding down its retail operations in Russia – a move initiated before the invasion. Although the bank has yet to announce its intention to exit its corporate operations in the country, The TRADE has heard from market sources that its exposure to Russian assets could also be in the billions, with steep markdowns possible. The bank’s emerging markets fixed income trading desk suffered a hit of around $100 million, according to reports, due to its exposure to Russia – against losses of around $50 million. dollars each for the offices of Goldman Sachs and Société Générale.
Most observers expect Russia-related transaction writedowns to increase significantly in the coming weeks and months, due to high asset price volatility, with market price positions moving rapidly. With the current uncertainty and the frantic disengagement of most major players from their Russian positions, it is likely that we will see losses continue to mount.