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March 28, 2017, 6:41 p.m. EDT

BlackRock bets on robots to improve Its stock picking

Seven portfolio managers, scores of workers expected to get boot

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By Sarah Krouse


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BlackRock offices in New York City.

The era of the star stock picker is coming to an end at the world’s largest money manager.

BlackRock Inc. /zigman2/quotes/207946232/composite BLK -1.27%  unveiled Tuesday an overhaul of its actively managed equities business that will include job losses, pricing changes and a greater emphasis on computer models that inform investments.

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Think you would win an argument with a robot? Watch this.

Osaka University and NTT Laboratories recently created the first "discussion dialogue" androids - the only robots that have human-like independent cognitive abilities, as opposed to scripted speech.

The company’s new strategy centers on a view that it is difficult for human beings to beat the market with traditional bets on large U.S. stocks. Seven stock portfolio managers are among several dozen employees who are expected to go as part of the revamp, a person familiar with the matter said.

For the first time BlackRock’s Main Street customers will be able to buy lower-cost quantitative stock funds that rely on data and computer systems to make predictions, an investment option previously available only to large institutional investors. Some existing funds will merge, get new investment mandates or close.

The changes are the most dramatic attempt yet to rejuvenate a unit that has long lagged rivals in performance. Clients have pulled their money from the actively managed stock business in three of the past four years even as BlackRock’s total assets climbed to a record $5.1 trillion. BlackRock had $275.1 billion in active equity assets under management at the end of December, down from $317.3 billion three years earlier.

An expanded version of this report is available at WSJ.com .

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/zigman2/quotes/207946232/composite
US : U.S.: NYSE
$ 712.98
-9.20 -1.27%
Volume: 1.14M
Dec. 2, 2022 4:00p
P/E Ratio
19.64
Dividend Yield
2.74%
Market Cap
$107.09 billion
Rev. per Employee
$988,424
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