The move may raise eyebrows in the global wealth and asset management sector. PNC owned over 22 per cent of BlackRock, in an investment relationship spanning a quarter of a century.

US-listed PNC Financial Services Group – which provides wealth management among its offerings – is selling its 22.4 per cent stake in asset management colossus BlackRock. It is exiting a 25-year investment, a move that comes as fund managers and banks wrestle with turbulent market conditions. 

PNC said yesterday that it holds 34.8 million common and Series B preferred shares of BlackRock. 

BlackRock has agreed to repurchase $1.1 billion of its stock from PNC, BlackRock said in a separate statement. 

The divestiture of PNC's stake in BlackRock will eliminate any regulatory obligations associated with the ownership of a large position in another diversified financial services company, PNC chairman, president and chief executive William S Demchak said. 

PNC originally purchased BlackRock in 1995 for about $240 million (source: Wall Street Journal, May 11); its stake has declined in percentage terms over the years, however. (The WSJ said that PNC’s shares in BlackRock are worth roughly $17 billion today, so on a paper valuation, such a figure equates to an approximate 70-fold gain for PNC.)

BlackRock's fortunes waxed during the past decade in an equity market bull run and due to its prominent role in the low-cost exchange traded funds market.

"BlackRock's long track record of strong performance and growth has created significant value since PNC acquired our stake in the company.  As good stewards of shareholder capital, we have consistently reviewed options to unlock the value of our investment," Demchak said

"We feel the time is now right to do just that, realizing a substantial return on our investment, significantly enhancing our already strong balance sheet and liquidity, and leaving PNC very well-positioned to take advantage of potential investment opportunities that history has shown can arise in disrupted markets."

PNC, like its peers, has been hit by the coronavirus pandemic and associated lockdowns. On April 15 it reported net income of $915 million, a slide of $466 million driven by a higher provision for credit losses. PNC returned $1.9 billion of capital to shareholders in Q1 through repurchases of 10.1 million common shares for $1.4 billion and dividends on common shares of $500 million.

BlackRock is the world’s largest asset manager, although its fortunes have been dented by the COVID-19 pandemic. It recently reported first-quarter assets under management of $6.466 trillion, a 1 per cent drop from the same quarter a year earlier and long-term net outflows of $18.7 billion in the quarter. Operating income fell by 45 per cent year-on-year to $684 million; revenue, however, rose by 11 per cent to $3.71 billion.