BlackRock Deal Likely to Boost Asset Management Shares

The union of Merrill Lynch's and BlackRock's asset management arms, the biggest deal ever, is likely to continue to boost the stocks of publicly traded asset management firms, Bloomberg reports. In fact, over the past year, shares of the world's 50 biggest money firms have risen an average 42% 3/4 nearly four times the Morgan Stanley Capital International's World Index.

Pacific Management (up nearly 300%), Aberdeen Asset Management (up 119%), BlackRock (up 82%), Legg Mason (up 67%) and Franklin Resources (up 41%) have seen some of the biggest gains.

What's been driving these companies' spectacular growth has been rising stock and bond markets, as well as an increasing need for retirement solutions to meet the needs of aging populations around the world.

"Interest in investment will increase as markets continue to go up, which is good news in terms of money flows," David Hussey, head of portfolio management at Barclays Investment Services, told Bloomberg.

In addition, there is increasing speculation that more asset management firms will merge, which is also driving up share prices.