Does BlackRock own everything? A deep dive into the extent of power held by the investment behemoth

There aren’t many names in the world of finance that command as much attention and speculation as BlackRock (NYSE: BLK). With its colossal $10.47 trillion in assets under management (AUM) as of Q1 2024, the company often prompts questions about the extent of its influence and ownership. Indeed, you’ve probably heard the question, “Does BlackRock own everything?” and wondered about it, too.

In this article, we’ll delve into the reality behind this question, examining BlackRock’s holdings, acquisitions, and potential future moves to shed light on the true nature of its power.

What does BlackRock own?

So, does BlackRock own everything? Well, no. At its core, BlackRock operates as an asset management firm, tasked with managing assets on behalf of its clients. While the company’s funds may hold substantial stakes in numerous large corporations, it’s essential to recognize that these investments belong to the clients who own the funds, not to BlackRock itself.

Despite its massive size and significant assets on its balance sheet, BlackRock’s direct equity investments into other companies it doesn’t own represent a relatively small portion of its operations.

What companies does BlackRock own?

To demystify the extent of BlackRock’s ownership, let’s examine some of the companies it has acquired over the years:

• Merrill Lynch Investment Management: Acquired in 2006 for $9.7 billion, expanding BLK’s retail and international investment management capabilities;

• Barclays Global Investor (BGI): Purchased in 2009 for $13.5 billion, doubling BLK’s AUM to $2.7 trillion and including the popular exchange-traded fund (ETF) platform iShares;

• First Reserve Infrastructure Funds: Acquired in 2017, expanding BLK’s Real Assets platform;

• Kreos Capital: Bought in 2023 for $400 million, enhancing BLK’s global credit asset management capabilities;

• eFront: Purchased in 2019 to strengthen BLK’s technology platform;

• Aperio Group: Acquired in 2021, specializing in tax-optimized index equity separately managed accounts.

Other investments

In addition to wholly owned companies, BlackRock has made strategic minority investments, including:

• Acorns: An investment in the micro-investing app in 2018, now an anchor investor in Acorns;

• iCapital: Increased stake in the technology platform for alternative investments in 2020, becoming its largest minority investor.

BlackRock stock price today

The future of BlackRock

BlackRock’s appetite for acquisitions remains robust, with the company actively seeking opportunities to expand its investment management platform. Recent agreements to acquire SpiderRock Advisors and Global Infrastructure Partners (GIP) exemplify its strategic approach to growth. As BlackRock continues to evolve, understanding its potential future moves is crucial for investors and industry observers alike.

Potential acquisition targets

Looking ahead, several sectors and companies could pique BlackRock’s interest:

• Private equity giants: Companies like Carlyle Group (NASDAQ: CG) or Apollo Global Management (NYSE: APO) could align with BlackRock’s strategy to compete in the alternative asset management space;

• Technology startups: With retail investors increasingly turning to alternative investments, technology-focused startups catering to this market, such as CrowdStreet or YieldStreet, may attract BLK’s attention.

The alternative sector

The alternative investments sector represents a significant growth opportunity for BlackRock. With forecasts predicting substantial AUM growth by 2028, the company is poised to capitalize on emerging trends and investor preferences within this space. As traditional banking retrenches, private credit funds stand to fill the void, presenting lucrative opportunities for savvy investors like BLK.

No, BlackRock does not own everything

In conclusion, while BlackRock wields considerable influence in the financial world, the notion that it owns everything is a myth.

As an asset manager, BlackRock stewards investments on behalf of its clients, rather than owning them outright. By examining its acquisitions, future prospects, and strategic direction, investors can gain a clearer understanding of the company’s role in the market and its potential impact on their portfolios.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.