# Understanding BlackRock: The World’s Largest Asset Manager
BlackRock is a global investment management corporation based in New York City. Established in 1988, the firm has grown significantly over the years and now stands as the world’s largest asset manager, with trillions of dollars under management. The company’s services include investment management, risk management, and advisory services for institutional and retail clients across the globe.
The Formation and Growth of BlackRock
Founded by eight partners, including Larry Fink and Robert S. Kapito, BlackRock started out as a risk management and fixed income institutional asset manager. Over the years, BlackRock has expanded its portfolio through a mix of organic growth and strategic acquisitions. Key acquisitions that have shaped BlackRock’s trajectory include its purchase of Merrill Lynch Investment Managers in 2006 and Barclays Global Investors in 2009.
The latter deal included the acquisition of iShares, which propelled BlackRock to the forefront of exchange-traded fund (ETF) management. Today, iShares are some of the most popular ETFs on the market. Their simple structure and liquidity have made them a favorite among individual and institutional investors alike.
Innovation and Technology at BlackRock
BlackRock has also been at the cutting edge of incorporating technology into its offerings. Arguably the most significant example of this innovation is Aladdin, BlackRock’s unified investment platform. The system provides a suite of tools that integrate trading, portfolio management, risk analysis, and client servicing. Aladdin is not only used internally by BlackRock; it has also been adopted by other investment firms, who value its comprehensive approach to understanding portfolio risks and opportunities.
BlackRock’s Global Impact and Controversies
With its considerable influence, BlackRock plays a notable role in global financial markets. As such, it often participates in discussions about corporate governance reforms and advocates for sustainable investing practices. Larry Fink’s annual letters to CEOs underline BlackRock’s focus on environmental, social, and governance (ESG) issues and indicate how central sustainability has become to modern investment practices.
However, BlackRock’s size and influence have subjected it to various controversies and criticisms. Critics argue that as an investor in many companies worldwide, it holds excessive influence over corporate decision-making. Others suggest that it could present systemic risks to global financial stability given its sheer size.
Expansion into Retail Investment
While historically focused on institutional clients, in recent years, BlackRock has increasingly targeted individual investors. With tools like its robo-advisor offering—FutureAdvisor—and ongoing innovation in iShares ETFs, it has made significant strides into the retail investment realm. This democratisation of asset management enables more people to access sophisticated investment instruments that were once exclusive to institutional clients.
Sustainable Investing Initiative
Sustainability initiatives at BlackRock have taken center stage in recent years, especially as climate change concerns have become more pressing. BlackRock has repeatedly communicated its intention to integrate climate risks into its investment decision process, recognizing that climate change is a driver of financial risk and return outcomes. As part of their sustainable investment endeavors, they launched funds focused on investments that particularly align with long-term social and environmental principles.
Notes
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BlackRock was founded in 1988 by eight partners including current CEO Larry Fink
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As of January 2023, it is reported to manage over $10 trillion in assets
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BlackRock’s acquisition of Barclays Global Investors included the acquisition of iShares, which greatly expanded their reach into ETFs
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Aladdin is BlackRock’s end-to-end investment platform that provides comprehensive risk analysis for its users
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CEO Larry Fink’s annual letters often address corporate responsibility and sustainable investing practices
Image description: The facade of BlackRock’s headquarters located in New York City with people moving around reflects an image of a prominent financial institution.