BlackRock is in talks to form a fund to help UBS, Switzerland’s largest bank, recover from $38 billion of subprime-mortgage-related write-downs, said two people with knowledge of the discussions.
BlackRock, manager of almost $1.4 trillion of assets, is seeking cash from investors to create a new entity that would hold and eventually sell the mortgage assets of Zurich-based UBS as the markets recover. New York-based BlackRock is targeting returns of more than 15 percent, said the people, who asked not to be identified because they aren’t authorized to disclose the information. The talks might not lead to an agreement, they said.
BlackRock has held similar discussions with financial institutions around the world that are reeling from more than $300 billion in mortgage-related losses and asset write-downs.
Creating a so-called bad bank owned by investors is one way for financial companies to reduce losses so they can resume lending and revive revenue and profits amid the worst housing slump since the Great Depression.
