The core challenge for Larry Fink and his team at BlackRock [profile], in the eyes of Morningstar, is "forging a cohesive effective, fundholder-friendly culture and delivering superior fund returns while growing rapidly and mainly through acquisitions."

Dan Culloton, associate director of fund analysis, explained the mutual fund ratings shop's recent C stewardship grade for BlackRock in a two-page piece weighing the good and the bad at the world's largest asset manager.

M* has "serious reservations" about BlackRock, noting that its mutual fund survival rates (percentage of funds that stay around and perform above average) were under 35 percent for the past three, five and ten years as of March 31. Morningstar's uncertain about the long-term impact of last year's BlackRock "strategic product review committee, salesforce combination and investment unit operations" changes and about its predilection for having at least one dog in almost every secular product trend, and a high PM turnover rate.

Yet Morningstar also praises BlackRock for having "strong, stable leadership" and "a clear vision for the future, a focus on asset management, and deep financial and operational resources that can attract talent." 

Edited by: Neil Anderson, Managing Editor


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