US asset manager BlackRock Inc. will continue running European operations and its regional headquarters in the UK after Brexit, relocating only a handful of jobs to expanded offices in the Netherlands and France.
A memo to staff, confirmed by Blackrock on Wednesday, stated that the company plans two major changes to its structure. The first will see its Netherlands office take on a bigger role to become the main legal division for most of the business performed for clients in the European Union (EU).
The second, confirmed in September, will see its Paris office expand to become the key unit for soc-called alternative investments like real estate and infrastructure.
According to the memo, BlackRock has been preparing for the operational, legal, and strategic impacts of Brexit for several years. At this stage, only very few roles will be affected by their plans to extend the regulatory permissions for existing entities in Continental Europe.
Budapest is set to become BlackRock’s biggest European office once Britain leaves the bloc, housing around 450 staff primarily focusing on technology and back-office functions.
A source with knowledge of the matter said total moves out of the UK in the next couple of years would be minimal, with the Netherlands office having another 10 to 20 people as a result of the relocations and local hiring in the risk and legal unit.
The Paris office, which currently has 40 employees, mainly in sales, would grew twice to approximately 80 people over that time, but a large part of the staff would be hired locally, the source added.
Shares of BlackRock gained 0.03 percent to $387.60 in after-hours trading on Wednesday.
Finalizing Post-Brexit Plans
BlackRock’s decision comes as good news for London and Prime Minister Theresa May’s government as the country’s March 2019 departure from the EU and the end of discussions over an exit agreement between the UK and Germany draw closer.
The commitment of the New York-based firm means it will still have three times as many employees in Britain as in all of the remaining 27 EU countries combined. The world’s largest asset manager currently has 3,000 staff in the UK and manages about $6.3 trillion worldwide.
BlackRock had been among the most high-profile financial services companies yet to verify its Brexit plans.
More are still expected to announce them in the coming weeks as the majority anticipates a potential collapse in negotiations if guarantees on particular cross-border activities are not provided by December 1.
BlackRock, however, seemed to kept the possibility of further staff moves depending on how talks and post-Brexit regulatory rules change.
The memo stated that as there is still much political and regulatory uncertainty on the horizon, the firm remain flexible and continue to monitor all developments very closely. BlackRock also promised to provide updates, according to the memo.
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