BlackRock funds suffer $17bn losses on Russia exposure

BlackRock said it has racked up around $17bn in losses on its Russian securities exposure after heavily marking down their value following the Ukraine invasion.

The world’s biggest asset manager said it held more than $18.2bn of Russian assets at the end of January across both its active and passive funds. The stringent sanctions imposed on Russia, where the Moscow Exchange remains closed, has rendered the country’s securities virtually impossible to trade. 

BlackRock said it had written down the value of its Russian assets to $1bn at the end of February, underlining their collapse in value. The investment manager, which passed $10tn in assets in January, said Russia now comprises less than 0.01% of its total funds under management.

The losses are the largest yet reported by an asset manager, but this is little surprise, given the company’s size and its large passive business. It emerged last week that Pimco has around $2.6bn of Russian exposure, predominantly held in the country’s sovereign bonds and credit default swaps.

BlackRock said it suspended the purchase of Russian securities across both its active and index tracking funds on 28 February. Russia is also set to be removed from MSCI, FTSE Russell and JP Morgan indices that BlackRock’s exchange-traded funds (ETFs) track from this week.

Larry Fink, BlackRock’s chairman and CEO, said in a LinkedIn post that the situation remains ‘highly complex’ and ‘fluid’.

‘BlackRock will continue actively consulting with regulators, index providers and other market participants to help ensure our clients can exit their positions in Russian securities, whenever and wherever regulatory and market conditions allow,’ he wrote.

Credit Suisse revealed it has $915m of exposure to Russia last week, including loan collateral in its private bank, and UBS around $200m. Goldman Sachs and JP Morgan announced they are winding down their operations in the country ahead of exiting the market.