If you are someone that pays attention to financial news or invests in the U.S. stock market, chances are you have heard about BlackRock – the largest investment management firm in the world, with AUM of over $10 trillion.
The sheer financial influence of BlackRock has shrouded the company’s operations in mystery, with a variety of conspiracies and speculations becoming increasingly popular over the years.
BlackRock predominantly offers asset management services and is one of the largest issuers of ETFs in the world – covering anything from the U.S. stock market to emerging private markets all over the world, including sector-specific funds.
To better understand why BlackRock has become so successful, it is important to take a look at the company’s history – its beginnings and the key products and services that shape its daily operations.
How BlackRock’s story started
BlackRock was founded in 1988 by Larry Fink and partners Robert Kapito and Susan Wagner – as a risk management and fixed income institutional asset manager. The firm started under the Blackstone Group umbrella, with the aim of creating a new type of investment management company that prioritized risk control and data-driven decision making.
Larry Fink had prior experience of leadership roles at First Boston and brought deep expertise in mortgage-backed securities. However, he had also suffered great losses at First Boston, which further highlighted the importance of risk management in the investing process.
In 1992, the company separated from Blackstone Group and rebranded as BlackRock. The company eventually went public in 1999, after expanding aggressively through a series of strategic acquisitions.
A major highlight of BlackRock’s operations came in 2009, when the firm acquired Barclays Global Investors, which put BlackRock firmly on the map, among the world’s largest asset management companies. The iShares ETF business is the most recognizable brand of exchange-traded funds on the market today – offering hundreds of ETFs from various sectors and geographies globally.
BlackRock’s investment services
While an asset management company through and through, BlackRock offers a diverse selection of services to its clients, which include anything from family offices and trusts, to pension funds and mega corporations all over the world.
Some notable services available to BlackRock clients include the following:
- iShares ETFs – BlackRock is the largest provider of exchange-traded funds globally through its iShares brand. These products allow investors all over the world to invest in various asset classes, sectors, and global markets at low cost and high fund liquidity
- Institutional asset management – BlackRock manages investments for governments, pension funds, insurance companies, and corporations. Equities, fixed-income securities, and alternative assets are a needful of the many investment vehicles available to BlackRock clients
- Aladdin – BlackRock’s proprietary risk management and investment platform. Aladdin provides data, analytics, and technology infrastructure for portfolio management, used by both BlackRock and external clients
- ESG investing – BlackRock has made ESG (Environmental, Social, and Governance) investing a key focus, offering funds and strategies aimed at long-term sustainable returns
This variety allows investors to choose between hundreds of different funds and alternative markets, including private equity, collectibles, commodity funds, etc.
How to invest in BlackRock
For investors interested in BlackRock’s services, the official website of the company provides plenty of information regarding each financial product available to its clients, including Aladdin.
However, some of the funds are reserved for high net worth individuals and institutions and have a high minimum investment requirement.
On the other hand, the iShares brand offers some of the most cost-effective exchange-traded funds available on the market, which means anyone can find them using their brokerage platforms and invest with no hassle.
Conversely, if you wish to become a shareholder of the company, you can invest in BlackRock stock, which is publicly listed on the New York Stock Exchange, under the ticker symbol ‘BLK’.
In fact, BlackRock is one of the largest publicly traded asset managers in the world, with a market capitalization of over $145 billion. It is worth noting that the company also pays dividends to its shareholders and has a dividend yield of 2.26% as of this writing.
