BlackRock began as a fixed-income institutional manager in 1988 and steadily acquired assets until it landed its biggest prize, the iShares ETF business of Barclays Global Investors in December 2009 — a deal that doubled its assets to $3.29 trillion from $1.49 trillion. Since that transaction, BlackRock has reigned as the world's largest asset manager.
But during an investor presentation in June, BlackRock noted that its revenue accounts for only a 3% share of the global asset management industry as of 2020 — and that the top five asset managers had an 11% share of total global revenues, a figure smaller than what the top firms in such sectors as cloud computing and sales and trading control, according to Bloomberg.
But that has not stopped voices such as Sen. Elizabeth Warren, D.-Mass., who has called for stricter government regulation of the asset manager as a systemically important financial institution.
As of Sept. 30, more than half of BlackRock's assets were in equities ($5 trillion); about 29% in fixed income ($2.7 trillion); 8.2% in multiasset ($773 billion); and 2.7% in alternatives ($256 billion), according to its latest earnings report. Another 7.5% ($712 billion) was parked in cash, the report showed.
Since the end of 2009 after the BGI acquisition, the equity portion of BlackRock's portfolio has soared by 225% while the fixed-income segment has jumped by 157%. However, multiasset strategies have surged by 444% over that period, making it the fastest-growing product type.
By client type, institutional assets dominate, but BlackRock's ETF business has outpaced growth in its retail and institutional segments by a wide margin. Between the end of 2012 and the end of the third quarter of 2021, ETF assets at BlackRock have quadrupled to $3.04 trillion; while institutional assets have about doubled to $4.7 trillion and retail assets climbed by 148% to $1 trillion over that period.
Changes in market value have played the most dominant role in pushing up BlackRock's overall AUM. Since the end of 2009 through Sept. 30, 2021 — a period that saw BlackRock's AUM expand by more than $6 trillion — market growth accounted for 65% ($3.98 trillion) of that increase, according to Pensions & Investments' calculations based on SEC filings.
Benjamin Phillips, head of asset management global advisory services at Broadridge Financial Solutions, a corporate services and financial technology company based in Lake Success, N.Y., said by email that BlackRock's AUM growth reflects the "evolution of the asset management industry over the past quarter century — fueled by shifts into multiasset, passive investing, globalization, private markets, sustainability and most recently technology and a growing focus on the individual investor — and all encouraged by mergers and acquisitions."
Cathy Seifert, senior equity analyst at CFRA Research in New York, said that while $10 trillion is "just a number, it's a very big number" that highlights the need for scale in the marketplace in a climate where fee revenues are facing downward pressure.
John Coyne, chairman of asset manager Spouting Rock Asset Management, Bryn Mawr, Pa., with $3.5 billion in AUM, noted that BlackRock CEO Laurence D. Fink understands the parameters of risk and return better than any executive in the industry. Mr. Coyne said iShares "allowed BlackRock to hit from both sides of the plate, active and passive, and therefore, able to focus on raising assets."
Ms. Seifert thinks BlackRock will continue to see growth in its vaunted ETF business.
"Unlike some other money managers, BlackRock has consistently generated strong organic growth," she said. "And given their strong internal culture, I think they will maintain this capability and keep expanding."