BlackRock’s $13.5 billion deal raises the valuation bar.

ETF and index people the world ‘round are smiling today. $13.5 billion is a big number. And this BlackRock deal is big not just for the index/ETF industry, but the financial sector in general.  It underscores just how big basis point-linked passive assets have gotten.

As I said a couple days ago in my IU.eu blog titled BlackRock IS the Buyer (Paul Amery has a nice follow-on blog there as well), this is a powerhouse deal. It’s a deal that minces no words, and says what it means. And what it means is we’ve suddenly got a global behemoth, THE global behemoth of an asset manager, with $2.7 trillion in assets. Good lord.  And frankly, on paper at least, it’s a marriage made in heaven, with BGI in a dominant position where BlackRock is mostly absent: ETFs and institutional indexed asset

New reports put BlackRock's deal for BGI at $13 billion.

During the weekend, several new articles appeared in British papers reporting that BlackRock Inc. is closing in on a deal to acquire Barclays Global Investors, the parent company of iShares, in a transaction worth up to US$13 billion.

But not all the reports were as definitive as the one coming out of the US late last week. Pensions & Investments magazine, on its Web site, broke the news late Friday afternoon after markets had closed in the US. It quoted unnamed sources as saying that the groundwork for a deal was in place and that an announcement would be forthcoming.

The story also had estimates that a BlackRock purchase of BGI would surpass $10 billion. (See related story here.)

However, in a story over the weekend, a report out of London by the Financial Times said that Barclays isn't expected to

Reports surfaced in London on Sunday that at least three new bids for iShares have surfaced.  

(Editor's note: The following was submitted by IndexUniverse.com's Murray Coleman in San Francisco and IndexUniverse.EU's Paul Amery in London.)

The recently announced $4.4 billion deal by Barclays Global Investors to sell its exchange-traded funds business to private equity manager CVC Captial Partners could be in jeporday. 

Reports surfaced in London on Sunday that at least three new bids have surfaced. The Daily Telegraph is naming private equity groups Apax, BC Partners and Hellman & Friedman as parties expressing an interest in bidding more for iShares than the original terms offered by CVC Capital.

A Barclays spokesman told the paper that it was too early to tell if any new offers would turn into anything concrete. But he did tell

Reports surfaced in London on Sunday that at least three new bids for iShares have surfaced.  

(Editor's note: The following was submitted by IndexUniverse.com's Murray Coleman in San Francisco and IndexUniverse.EU's Paul Amery in London.)

The recently announced $4.4 billion deal by San Francisco-based Barclays Global Investors to sell its exchange-traded funds business to private equity manager CVC Captial Partners could be in jeporday. 

Reports surfaced in London on Sunday that at least three new bids have surfaced. The Daily Telegraph is naming private equity groups Apax, BC Partners and Hellman & Friedman as parties expressing an interest in bidding more for iShares than the original terms offered by CVC Capital.

A report by the Sunday Times of London also listed BC Partners. In fact, the paper says that the firm is now willing

There's been plenty of speculation on the sale of iShares. Finally, here's the truth.

We've got Matt Hougan and John Spence and Chuck Jaffe and the Wall Street Journal—and now even Murray Coleman all jumping in and speculating on what's going to happen with iShares. The truth is that none of them know—and even the people over at BGI probably don't know. But I do.

I just don't see it happening. Or rather, I do think that an eventual separation has become exponentially more likely ... I just don't think it happens immediately. 

First of all, let me point you to the best blog on the topic yet. It's Paul Amery's blog from over on the http://www.indexuniverse.eu/ site. Here are the Cliff's NotesTM of what Paul covered in his blog that few others have hit upon:

1. Barclays needs to tell

Sin Stocks & Consumer Staples

That's the recipe for success in this downturn, according to a panel of investment pros put together by Forbes to review portfolio strategies in these troubling times. The story takes a look at a range of investments, including exchange-traded funds.

You can read the story here. 

XLF Gets Hammered In Market's Reaction To Geithner

This Barron's update notes that the Financial Select Sector SPDR (NYSE: XLF) got hammered on Tuesday as investors gave a big thumbs-down to Treasury Secretary Timothy Geithner. 

The article also mentions a column by a Dow Jones Newswires  writer about the speech. Not to toot one's own horn, but you might also be interested in our own Paul Amery's take on the whole affair. He's managing editor of IndexUniverse's European site and his views from the other side of the pond are quite revealing. 

You can read the Barron's

Matt—you are right about the fundamental shift in advisor investing.

I would say I'm alternately excited about and terrified by the trend you discuss where advisors increasingly take control of their clients' portfolios in every way. To the degree to which strong asset allocation models are being implemented, and the focus on the clients' long-term financial picture, matching assets to liabilities, etc., I think we're in a wonderful place.

The reason is that if you know what you're doing, there has never been a better array of financial products available to you, covering every imaginable investable area at increasingly lower cost, better tax efficiency and targeted exposure. I love that investors now have options to invest in commodities, in emerging markets, in real estate and with leverage. But these very same products, which have been a boon to many investors, are leading to confusion for a great many more, and they

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In one of the more shocking developments of a shocking week+,
it looks like Barclays PLC may let the Lehman structured products, including
their Opta ETNs, default.

This is a stunner. 
Our publications go from frankly getting a lot of criticism of “overplaying”
the credit risk issue with ETNs to dutifully reporting on what looks to be the
first ETN default…in the space of, uh, less than a month.  This is a shocking, shocking development and
our forceful reporting of the issue was scorned in some quarters and praised in
others.  And if those things DO default,
how real is that credit risk for you?

The amazing part of this is that it appears that Barclays
PLC, who bought the Lehman Brothers investment banking and capital marketing
business for a SONG (and none of the liabilities), appears willing to let all
of those structured products,

…