August 13, 2018
DUE DILIGENCE Alert: MODERATE
COMPETITIVE Alert: 2
Event: BlackRock sustainable funds continue to maintain positions in Turkey in face of crisis.
Briefing Points: i) Blackrock’s sustainable investment funds continue to hold debt positions in Turkey as sovereign concerns rise, ii) Giulla Pellegrini, who heads BlackRock’s EMD sustainable investments stated that they have, however, lessened their exposure in light of recent events, and iii) Mr. Pellegrini notes that “policy unpredictability” with a new government and potentially less central bank “independence” are factors affecting the outlook for Turkey.
Affected Fund(s): BGF EM Bond Funds
Asset Classes: Non-US and Emerging Bond Funds
Management Company: BlackRock, Inc. (New York, NY)
DD Concern: Change in risk profile
Marketing Considerations: Addressing the financial crisis in Turkey will serve as a solid test of the manager’s analytical and management capabilities in the “hot” EM market. Of course, if the fund takes a hit, it will erase any “bragging” rights.