BlackRock’s Kapito Says Firm Must Penetrate U.S. Retail Market

BlackRock Inc.’s Robert Kapito, president of the world’s largest asset manager, said the firm sees an opportunity to grow by selling more funds to individuals.

“Retail is an enormous growth opportunity,” Kapito said today at the Credit Suisse Financial Services Forum. New York- based BlackRock is still “underpenetrated” in the U.S. retail market, excluding exchange-traded funds, with less than a 2 percent market share for assets under management in open-end mutual funds, he said.

BlackRock, which manages $3.79 trillion, has been urging investors to get back into higher-yielding assets such as stocks as it seeks to expand its retail business. Kapito, along with Laurence D. Fink, BlackRock’s chief executive officer, have said that clients need to diversify and can be harmed by staying in cash-like products.

Kapito said individuals represents about 12 percent of BlackRock’s assets under management, while accounting for 34 percent of base fees. BlackRock has less patience with underperforming active products and will seek to replace teams quicker than in the past, he said, as the firm seeks to boost performance and attract new money.

To contact the reporter on this story: Alexis Leondis in New York at aleondis@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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