BlackRock
BlackRock is an investment management firm with over $10 trillion of assets under management. They serve individuals and families, companies and governments with a range of investment products, supported by their investment technology platform - Aladdin.
Employees: 19 900
Revenue: $17.873B for FY2022
HQ Location: New York, US
What they do:
Investment products across a range of assets including equities (stocks), fixed income (bonds), alternatives and money market instruments.
Products are offered directly and via intermediaries including mutual funds and Exchange Traded Funds (ETFs).
They provide technology platforms including Aladdin, Aladdin Wealth, eFront and Cachematrix.
“Like our clients – pensions, insurers, governments, and individual savers – BlackRock’s focus remains on investing for the long term. The current environment offers incredible opportunities for long-term investors and we enter 2023 well-positioned and confident in our ability to deliver for our clients, employees, and shareholders.”
Their vision and priorities:
Management seeks to deliver value to shareholders over time by:
Focus on strong performance providing alpha for active products and limited or no tracking error for index products
Global reach with 50% of employees outside of the US
Breadth of product offerings
Differentiated client relationships to allow them to lead customers
A long standing commitment to innovation, technology services and development of technology products including Aladdin.
Blackrocks Global Outlook for 2023
Blackrocks Investment Themes:
Pricing the damage
Blackrock believes that central banks are deliberately causing recession by overtightening policy to tame inflation. Which makes a recession foretold. What matters to them is their view on the pricing of economic damage and their assessment of the market risk sentiment. Their investment implication is to stay underweight in DM equities but they expect to turn more positive at some point in 2023.
Rethinking bonds
Blackrock sees higher as a positive to investors long starved of income in bonds. Their investment implication is that they plan to stay underweight in long-term government bonds.
Living with inflation
Blackrock understands that aging workforces and geopolitical fragmentation keep inflation persistently above pre-pandemic levels. Their investment implication is to stay overweight with inflation-linked bonds on both tactical and strategic horizons.
Things to know right now
Martin Small to Succeed Gary Shedlin as BlackRock CFO in March 2023
Martin Small has been running the US Wealth Advisory business for the last four years and will take on the company’s CFO duties in March next year.
“Martin has had a truly ‘One BlackRock’ career at the firm, working across a diverse mix of teams that give him a broad and deep knowledge of the firm and our people”
James Raby is named as APAC Head of Wealth
James Raby holds more than 15 years of experience at the firm including leadership roles across strategy, corporate development, finance, and audit in London, San Francisco, New York, and Hong Kong.
Record new sales in Aladdin
Aladdin is an investment technology platform and a key strategic initiative for the company.
Aladdin allows teams across investments, trading, operations, administration, risk, compliance, and corporate oversight to use a consistent process and share the same data.
Record net new sales of Aladdin were seen in Q4 underscoring its importance in periods of market volatility.
Blackrock scaled its private markets platform, raising $35 billion of capital, with particular strength in private credit and infrastructure.
What does each business unit do?
Retail
Their retail division holds approximately 10% of the assets under management, providing individuals and families with investment products across equities, fixed income, multi-asset, and alternative investment products.
ETF
An Exchange Traded Fund (ETF) is a collection of assets that can be traded on the stock market like any normal stock.
The constituents of the ETF can be actively selected (an ETF focused on technology companies), or they can be index linked (an ETF that tracks the S&P 500)
Blackrock is the largest ETF provider in the world with $3.3 trillion under management.
Asset Management
This business unit helps private and institutional clients develop their investment portfolios and protect their wealth. From fixed income to equities to alternative investments, they give clients access to their global network of world-class investment specialists.
Institutional
This business unit represents approximately 50% of the assets under management, providing investment products to pension funds, corporations, and governments.
Blackrock is one of the largest managers of pension funds with $3.2 trillion under management.
Their financial calendar
Q1: January-March - Earnings 19th April 2023
Q2: April-June - Earnings 17th July 2023
Q3: July-September - Earnings 11th October 2023
Q4: September-December - Earnings 12th January 2024
Next Earnings Report:
Around 19th April 2023
Positives from the last earnings report:
$146 billion of quarterly long-term net inflows, including $61 billion
of active net inflows, with total net inflows of $114 billion reflecting
net outflows from cash management$393 billion of full-year long-term net inflows, reflects 4% organic
asset growth and positive organic base fee growth, led by record flows
into bond ETFs, significant outsourcing mandates, and growth in
private marketsRecord full-year net new sales of Aladdin and continued growth in
technology services revenue despite the negative impact of foreign
exchange movementsA restructuring charge of $91 million from the initiative to modify the size
and shape of the workforce to align more closely with strategic
priorities.$4.9 billion returned to shareholders in 2022, including $1.9 billion
of share repurchases
Challenges from the last earnings report:
8% decrease in full-year revenue primarily driven by the impact of
significantly lower markets and dollar appreciation on average Assets Under Management and lower performance fees14% decrease in full-year operating income