BlackRock Inc., the asset management arm of PNC Bank Corp., raised $126 million, or $14 a share, in its initial public offering Friday.

The sale of nine million shares, a 14% stake, has been closely watched because it is the first time a bank-affiliated investment company has gone public. The transaction values BlackRock, which had 1998 revenues of $339.5 million, at approximately $900 million.

The price fetched in the IPO was at the low end of the $14 to $17 range that was expected when PNC unveiled its offering plan in August, reflecting pressure on financial services companies in general.

Even so, "it's a premium valuation relative to the other companies," said a source close to the deal. He said only two other asset management firms -- Franklin Resources Inc. and T. Rowe Price -- have higher valuations against projected earnings.

The IPO could prompt other banking companies to consider selling minority stakes in their asset management businesses, said Geoffrey Bobroff, a mutual fund consultant in East Greenwich, R.I. By creating shares in these subsidiaries, companies such as Mellon Bank Corp., Bank of America Corp., and First Union Corp. could establish a new currency to reward their growing legions of asset-management employees, he said.

The move should also enable the fast-growing BlackRock to look at acquisitions "much more rigorously," said Dean Eberling, a managing director at Putnam, Lovell, de Guardiola & Thornton Inc. in New York. Banking companies often wish to avoid the goodwill assets that come with acquisitions, and if BlackRock were purely owned by a banking company, acquisition opportunities could "come and go," he said.

Officials at PNC and BlackRock declined to comment, citing a regulatory-imposed quiet period.

In a press release, the $75.6 billion-asset banking company said it expects to report an after-tax gain related to the offering of about $70 million this quarter.

It also said it granted its underwriters, led by Merrill Lynch & Co., an option to buy 1.35 million shares of BlackRock's common stock.

When PNC bought BlackRock Financial Management in 1995, it was a $25 billion-asset fixed-income shop.

It grew to $141.8 billion of assets under management on June 30, including a small equity component, and ranks among the top publicly traded managers by that measure.

BlackRock placed 33d in a ranking of 300 public and private U.S. asset management firms at the end of 1998, according to Institutional Investor. That's behind bank-owned asset managers, including Barclays Global Investors, which ranked second with $615.5 billion of assets under management, and State Street Global Advisors, which ranked fourth with $492.8 billion of assets under management.

"They really want to be in the top 10," said Christopher Kelsch, an associate analyst with Morningstar Inc. of Chicago. He said the IPO will help BlackRock raise its profile by giving the appearance that it is an "independent company and not necessarily reliant on PNC Bank."

The firm is also looking to boost its proprietary mutual fund sales by reaching out to financial planners, he said. PNC clients accounted for roughly 80% of BlackRock's assets on June 30, the company said.

Taking BlackRock public also allows the firm to offer equity stakes to its investment professionals, which is becoming increasingly important as firms in its peer group struggle to retain quality employees. Banking companies have a spotty record of retaining investment professionals, who flee to other firms for better compensation, usually in the form of revenue sharing and equity.

As firms get bigger, the portfolio managers and professionals who work there want an equity stake in the company, said Thomas D. McCandless, a senior bank analyst with at CIBC World Markets in New York.

"You can't give it if there isn't one," he said.

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