Gabriella Angotti-Jones—Bloomberg via Getty Images Amid the shockwaves of the Financial Crisis, asset management giant BlackRock saw an opportunity. It spent $34 million to become a co-founder of a new mortgage financing company. That investment became a winning bet. Even after having culled much of that stake, BlackRock’s holdings in PennyMac Financial Services are now worth some $589 million. Today BlackRock, the investment titan with $7.4 trillion under management, announced plans to donate those shares to a philanthropic effort aimed at boosting socio-economic mobility, especially among underserved populations across the world. BlackRock said it would earmark the remaining 20% stake in PennyMac for social-impact efforts. […]
Roughly half of the PennyMac shares will go to the existing BlackRock Charitable Fund. (That fund was also financed in part by PennyMac shares committed by BlackRock in 2013.) The other half will go to the newly created BlackRock Foundation.
The new foundation will invest and deploy grants across asset classes that promote better savings habits and greater access to savings funds.
Addressing a savings shortage
In the U.S., the statistics around the lack of savings and uncertain access to retirement funds have become a source of alarm. A May 2019 Federal Reserve Board survey found that 39% of Americans would be unable to pay for an unexpected $400 expense. A separate survey by the Government Accountability Office found that in 2016, 48% of Americans over 55 had no retirement savings.
“The donations we’re making toda—in line with our purpose as a firm—will support our commitment to creating greater financial well-being and advancing sustainability,” BlackRock CEO Larry Fink said in a statement.