After years of sluggish gains by its stock pickers, Blackrock is firing more than 30 people in its active equities group. The revamp moves $6b into cheaper funds where quants play a bigger role.
Chief Executive Officer Laurence D. Fink’s shift to quantitative strategies follows similar moves by hedge funds seeking a high-tech fix to their investment woes. Fink, who has re-jiggered his stock picking unit several times in recent years, now sees computer models and data science as the future of active-equity management. His move is driven by clients who are flocking to cheaper index-tracking exchange-traded funds, which benefits BlackRock’s ETF business while hurting its active managers.