What happened and why It is hardly a go-to-stock in a financial crash but amidst the tumbling markets and the expected asset-draining pandemic, the worlds largest asset manager, Blackrock (+13.21%) has once again left rivals in its wake. As equities stumbled, slumped and bounced back, Blackrock brought on board new customers and a flood of trading in the process. The asset manager's stock is up +32% this year, verses the +7% gain across the S&P 500. Meanwhile, the rest of the fund management competition is trading down by -3%. Blackrock has consistently shrugged off what should be, in theory, its biggest challenges. Instead, the company has responded to a financial crises with opportunistic measures. Dotcom... In the early 00s Blackrock was a fixed-income specialist and reaped the benefits of investors jumping out of equities and into bonds as interest rates tumbled, before swooping in on Merrill Lynch's fund management arm and enjoying the equity boom that followed. Post 2008... When banks were laid out flat in the wake of the financial crisis, Blackrock snapping up Barclays Global Investors and enjoying the longest bull market run in equities, since WW2. With Barclays, came the iShares team, the exchange traded fund (ETF) division that has grown 7x on the back of a global shift towards passive investing. It now accounts for a third of BlackRock’s assets and 40% of the world's ETF market. The growing appetite for robo advisers and stock trading platforms such as Robinhood and Freetrade - all customers of iShares - sees Blackrock serving a new generation of investors. And the financial giant is fast becoming envy of the most nimble fintech businesses, relentlessly reinventing itself like a fresh undergraduate. More recently, that has seen the asset manager shift towards becoming a technology provider. The company's risk management software, Aladdin, is proving a hit and last year the business the company added eFront to their portfolio of risk analysis services. 🔮 So what next... while Morgan Stanley and Franklin Templeton look to bolster their wealth offering with acquisitions, Blackrock is looking to bigger margins and growth. The company has earmarked two areas to maintain this extraordinary growth story... Private Equity... With more companies staying private for longer, Blackrock is determined to offer investors access through private funds.China... That is soooo 1990s? Well, its all about timing and Blackrock won its 1st round of approvals to sell funds to retail investors in China. | The Takeaway Blackrock continues to be an evangelist of growth in financial services, emerging from the pile of financial rubble around them like a financial phoenix. With China is set to topple the UK as the world’s second largest mutual fund market after America in the next 3 years, BlackRock is banking on regulatory approval to land in 2021. In September, BlackRock bagged another round of fundraising for its first private equity fund, Long Term Private Capital, which was launched last year. The fund now is expected to go through the $3bn barrier by the end of the year, but still tallies small compared to its rivals.
