COMPANY PROFILE -BlackRock, Inc.
Business Sector :Banking and Financial Services, Asset Management
Operating Geography :North America, United States, Global
About BlackRock, Inc. :BlackRock, Inc. is an US based global asset management company headquartered in New York City. Established in 1988, the company is largest asset manager globally with $6.3 trillion in assets under management (AUM) as of Jan 2018. The company serves clients in more than 100 countries globally and has 13,000 employees as of 2016.
BlackRock, Inc. Revenue :
USD 12.49 billion (FY ending 31st Dec 2017)
USD 11.15 billion (FY ending 31st Dec 2016)
Competitive Analysis of BlackRock, Inc.
|1. Largest investment firm globally with more than $5 trillion in assets under management |
2. Strong performance in challenging environment
3. Aladdin – BlackRock’s investment and risk management platform driving growth
4. Leveraging diversity and economies of scale
|1. iShares ETF funds plagued by lawsuits
2. Majorly dependent on a single risk management platform
|1. After-retirement financial solutions market set to grow with increase in ageing population|
2. Acquisitions in technology to diversify digital asset management capabilities
|1. Increase in market volatility with geopolitical unrest and adverse political developments
2. Increasing regulations to increase the cost of doing business
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Detailed SWOT Analysis of BlackRock, Inc.
1. Largest investment firm globally with more than $5 trillion in assets under management: BlackRock manages assets for its institutional and retail clients across a wide range of financial products. The assets under management by BlackRock clocked a whopping $.6.3 trillion as of Dec 2017. More than two-thirds of the assets managed are related to retirement and pension plans. Further, iShares which was acquired by BlackRock from Barclays is the largest global ETF provider and has grown from $385 billion at the time of acquisition to $1.3 trillion in assets under management across more than 800 ETFs. BlackRock’s reputation for best-in-class service and innovative solutions with efficient risk management techniques is its major strength and it has enabled it to attract more clients in an environment market by low yields and macroeconomic and political uncertainty
2. Strong performance in challenging environment: BlackRock’s strong performance in 2016 reflects its deep relationships with its stakeholders that it has built across the years. The company generated $202 billion of net inflows in FY16 which was historic record for the company representing 4% organic asset growth. The iShares also registered a record $140 billion of net inflows as BlackRock continued to strengthen its ETF division. BlackRock also returned $2.7 billion to its shareholders through a combination of dividends and buybacks in 2016. The company has maintained a healthy payout ratio in the range of 40-50% since
3. Aladdin – BlackRock’s investment and risk management platform driving growth: BlackRock leverages technology as a growth driver which has proven to be one of its key strengths and the recipe to success. The foundation of the company was on the very premise of providing best-in-class risk management and fiduciary practices and it has done the same with adopting the latest technology innovations. Aladdin is the company’s investment and risk management platform while iRetire platform focuses on personalized retirement solutions for individuals. BlackRock is also marketing its platform, Aladdin to other wealth management firms. In this regard UBS’s Wealth Management Americas has partnered with BlackRock to use Aladdin Risk for Wealth Management for insights in multi-asset portfolio analytics. According to CEO, Larry Fink the analytical technology platform holds the potential to account for 30% of the company’s revenue in five years, a significant growth from 7% revenue share in 2016.
4. Leveraging diversity and economies of scale: BlackRock has focused on strengthen the regional management in each of the geographies where it operates. Its serves clients in more than 100 countries with employees of more than 50 nationalities and speaking more than 100 different languages. This helps the organization adopt a global approach along with a local flavor by having a good understanding of the client’s language and culture BlackRock strives to leverage and sustain its economies of scale through internal capability development and through strategic acquisitions. The acquisition of Bank of America Global Capital Management boosted its global scale of global cash management business.
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References used in BlackRock, Inc. Analysis Report
2. BlackRock Q4 2016 Earnings: https://ir.blackrock.com/Cache/1001218900.PDF?O=PDF&T=&Y=&D=&FID=1001218900&iid=4048287
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BlackRock SWOT & PESTLE Analysis - SWOT & PESTLE.COM
SWOT & PESTLE.com (2020). BlackRock SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/blackrock/ [Accessed 26 Nov, 2020].
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