NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK) today announced that it has returned to
investors substantially all of the proceeds, at a profit, from its
BlackRock Public-Private Investment Fund (the “Fund”). These returns
represent a net multiple of 1.74x on funded capital and an internal rate
of return of 23.5% on Treasury’s equity investment since the Fund’s
inception in October 2009 as part of the Legacy Securities
Public-Private Investment Program (“PPIP”). The Fund, managed by
BlackRock, was jointly owned by the U.S. Department of the Treasury
(“Treasury”) and private investors. Treasury has received $917.1 million
in net equity distributions (consisting of the return of Treasury’s
$528.2 million investment in the Fund and approximately $388.9 million
in profits).
Additionally, the Fund has accrued $9.7 million in warrant proceeds to
be distributed to Treasury and has repaid approximately $1.09 billion of
the drawn amounts under the Treasury funded credit facility plus
interest.
“We are proud to have been selected as part of the PPIP and are
extremely grateful for Treasury’s expressed confidence that we could
deliver attractive returns, particularly during a time of such severe
stress on the global financial system,” said Robert S. Kapito, President
of BlackRock. “Our ability to aid in the stability of the
mortgage-backed security market and deliver solid investment returns is
evidence that a partnership between the public and private sectors can
be truly rewarding and profitable.”
Mr. Kapito continued: “As with all of our investments, our primary goal
is to maximize the return for all of our investors, including Treasury,
through a carefully constructed risk framework. When considering and
integrating the goals of the program with current conditions of the
marketplace we believed optimization of the Fund’s investment objectives
was achieved through timely liquidation.”
PPIP
On March 23, 2009, Treasury announced the Legacy Securities
Public-Private Investment Program as a key component of President
Obama’s Financial Stability Plan, which outlined a broad framework to
bring capital into the financial system and address the problem of
legacy real estate assets. PPIP was designed to support market
functioning and facilitate price discovery in the markets for legacy
commercial mortgage-backed securities ("CMBS") and non-agency
residential mortgage-backed securities ("RMBS"). Using capital allocated
from the Troubled Asset Relief Program alongside capital from private
investors, the PPIP was designed to generate a significant purchasing
power to buy legacy assets from the market. The Fund was one of nine
Public-Private Investment Partnerships in the program. Under the
program, the Fund held its initial closing in October 2009 and
ultimately deployed over 75% of the approximately $2.78 billion in
available committed capital, including $695.0 million in equity capital
commitments from Treasury, $695.0 million in capital commitments from
private investors, and $1.39 billion of committed debt capital from
Treasury.
Internal Rate of Return is based on daily cash flows and is calculated
net of fees and expenses, as of December 5, 2012.
About BlackRock
BlackRock is a leader in investment management, risk management and
advisory services for institutional and retail clients worldwide. At
September 30, 2012, BlackRock’s AUM was $3.673 trillion. BlackRock
offers products that span the risk spectrum to meet clients’ needs,
including active, enhanced and index strategies across markets and asset
classes. Products are offered in a variety of structures including
separate accounts, mutual funds, iShares® (exchange traded funds), and
other pooled investment vehicles. BlackRock also offers risk management,
advisory and enterprise investment system services to a broad base of
institutional investors through BlackRock Solutions®.
Headquartered in New York City, as of September 30, 2012, the firm has
approximately 10,400 employees in 29 countries and a major presence in
key global markets, including North and South America, Europe, Asia,
Australia and the Middle East and Africa. For additional information,
please visit the Company's website at www.blackrock.com.
BlackRock, Inc.
Brian Beades, 212-810-5596
brian.beades@blackrock.com
Source: BlackRock, Inc.