BlackRock, already the largest asset manager in the world, is forecasting that growing consolidation in the asset management space will yield an even bigger slice of the pie for the company in the future.
At BlackRock's 2023 Investor Day in New York on Wednesday, BlackRock Chief Operating Officer Rob Goldstein told assembled investors that asset management clients are beginning to consolidate their businesses, paring down the number of asset managers they deal with as they search for greater ease and efficiency and ways to reduce expenses.
"We believe this is just getting started," Mr. Goldstein said. "We believe this is the very early days of a very long shift … Why? Because it's better, faster and cheaper from the client's perspective."
Chief Financial Officer Martin Small said that the top five asset managers have a combined 16% of the global market, meaning the asset management space is still highly fragmented compared to other industries, like cloud computing, in which the top three companies — Amazon, Microsoft and Google — control two-thirds of the market.
Mr. Small, Mr. Goldstein and other executives told investors that BlackRock's Aladdin-based "Platform-as-a-Service" (PaaS) strategy — which President and co-founder Rob Kapito called "the only platform strategy in the asset management industry" — is key to BlackRock's plan to gain market share.
The platform, executives said, will increasingly become a one-stop-shop for all clients' needs.
"We believe this platform moat is unique in asset management, and that it's getting wider and deeper for BlackRock," said Mr. Small. "We see ample opportunity to grow."
BlackRock reported assets under management of about $9.09 trillion as of March 31.