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Founding BlackRock : history and origins of the active management giant
Blackrock was founded by Larry Fink , Robert Kapito , Susan Wagner , Barbara Novick , Ben Golub , Ralph Schlossin , Hugh Frater and Keith Anderson in 1988.
Blackrock is today recognized as the largest asset manager in the world, with $ 11,475 billion in management on September 30, 2024 , according to official figures published by the Company. This is equivalent to around 10 % of the world's market capitalization estimated at around $ 115,000 billion , which constitutes an unprecedented concentration of financial power in market history.
For comparison, its direct competitors remain far behind: Vanguard manages around $ 7,800 billion in active ingredients, while Fidelity is around 4,500 billion . This domination places BlackRock in a systemic position on a global scale, often qualified by analysts as "invisible" or "parallel state" because of its extensive influence on financial flows, listed business decisions and even certain public policies.
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Founding Blackrock : a massive imprint in global companies
According to a study published by the Federal Reserve in 2020 , BlackRock held significant participations in more than 95 % of companies making up the S&P 500 index . Through its funds, ETF Ishares, and management mandates, the company has shares in firms like Apple , Microsoft , Exxonmobil , Jpmorgan Chase or Alphabet .
Its panels regularly exceed 5 %, a threshold triggering regulatory declaration obligations. Such positions offer BlackRock a considerable voting power in the general meetings of large listed companies, reinforced by the rise of passive index funds.
Founding Blackrock an almost institutional role
BlackRock does not only act as an investor. The company is also a provider of technological services and strategic advice with public institutions. Aladdin Risk Management Software (Asset, Liabibility, and Debt and Derivatives Investment Network) now oversees around $ 21,600 billion in the world, including those of third -party institutions such as BNP Paribas , Allianz or certain banks.
BlackRock was by reserve to buy business obligations as part of COVVI-19 emergency measures in 2020, just as he had already played a key role in the management of toxic post-crisis of subprime assets in 2008.
Founding Blackrock beginnings marked by risk management
To better understand this influence, we must return to the creation of the company. Founded in 1988 under the name of Blackstone Financial Management , the company was born under the leadership of eight founders , former of First Boston and Lehman Brothers. Among them, Larry Fink , now CEO, was the main architect of his strategy. He is joined in particular by Robert Kapito (current president), Barbara Novic K , Susan Wagner and Keith Anderson .
In the 1980s, most of the asset managers focused mainly on financial performance without always precisely measuring the risks involved. The founders of Blackrock want to put the risk at the heart of each investment decision , using techniques borrowed from bond markets, where modeling is essential.
BlackRock puts from the start on transparency and technology to better understand the risks.
This is how the company develops Aladdin , a proprietary computer system designed to analyze investment portfolios in detail. Thanks to Aladdin, BlackRock can:
- Follow in real time what is happening in all the portfolios it manages.
- Test different market scenarios to anticipate possible losses.
- Check that risk levels remain within the limits defined with customers.
This approach quickly appeals to large institutional investors , such as banks, insurance or pension funds, which find more rigorous and transparent management than in other competitors.
Blackrock : a ramp -up accelerated by acquisitions
In 1995, PNC Financial Services Group took a majority participation in BlackRock , investing around $ 240 million . Unlike a classic acquisition, this operation leaves BlackRock an important operational autonomy under the direction of Larry Fink. PNC acts as a strategic shareholder, while allowing the young company to continue its development in asset management.
Over the years, BlackRock has been on targeted acquisitions: in 2004, she bought State Street Research & Management , then in 2006, Merrill Lynch Investment Managers , which strengthens its global presence and its institutional customers.
The real turning point intervened in 2009, with the acquisition of Barclays Global Investors (BGI ), including the very popular platform of ETF Ishares, for an amount of $ 13.5 billion. This operation immediately doubles the assets under management of BlackRock , which go from 1,300 to almost $ 2,800 billion, and propels it to the rank of larger asset manager in the world.
At the same time, PNC begins in 2010 to yield its shares in BlackRock , to the point of selling all of its participation (around 22.4 %) in 202 0, achieving a significant added value of more than $ 14 billion. This outing marks the end of a 25 -year -old partnership BlackRock has built its world domination.
Blackrock and S has a position on cryptocurrencies
BlackRock has adopted over the years a progressive and evolving approach to digital assets, in particular Bitcoin. For a long time, the company has maintained a reserved position, highlighting the risks of volatility, lack of clear regulation and problems linked to the transparency of the crypto markets.
In 2018, his CEO Larry Fink claimed that he saw "no serious demand" from his Institution Els clients for Bitcoin investment products, even if he highlighted the potential of Blockchain . At that time, the market remained marginal in the portfolios of major investors, and the regulatory framework in the United States was still vague.
However, as the cryptocurrency sector was structured - with the emergence of derivative products, institutional guard, and increased demand from professional investors - BlackRock has gradually integrated these assets into its field of analysis.
From 2020, the company authorized some of its funds to invest in future Bitcoin listed on the CME , and has multiplied public positions on the growing importance of the tokenization of assets, considered as a major evolution of the financial system.
The significant turning point intervened in June 2023, when BlackRock Officially submit a request for Bitcoin Spot ETF from the SEC. This event marks clear recognition of the legitimacy of these assets in the context of a traditional investment offer, under conditions of regulatory compliance. The deposit of this ETF had a notable impact on the market, with an immediate increase in Bitcoin prices at the time, reflecting expectations related to institutionalization of the sector.
In parallel, BlackRock is also interested in the wider ecosystem of the web3 . In 2024, the company announced the launch of the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) , a tokenized fund operating on the public blockchain Ethereum , allowing to perceive yields in USD in a programmable and transparent manner. This fund, reserved for accredited investors, is integrated into Coinbase Custody for the conservation of assets, which underlines the strategic rapprochement between BlackRock and the already established crypto infrastructure .
Summary of concrete BlackRock initiatives in cryptocurrencies:
- 2020: investment authorization in future bitcoin for certain funds.
- 2022: Integration of Bitcoin Trust into certain customer wallets via Coinbase Prime.
- 2023: Deposit of an ETF Bitcoin Spot with the SEC, in collaboration with Coinbase.
- 2024: Launch of the Buidl on Ethereumtokenized fund.
Today, BlackRock does not position itself as a militant player in the Crypto sector, but as an asset manager who follows (and dictates?) Market dynamics and offers different products.
Blackrock : a disputed actor and at the heart of power games
The power of BlackRock, now a manager of almost $ 11,500 billion in assets on September 30, 2024, continues to arouse strong criticism. The concentration of such a financial power in the hands of a single private player worries part of civil society, economists specializing in systemic risks and several political leaders.
Many analysts mention a systemic risk, especially in the event of a global financial crisis. His positions giving him a capacity for influence that goes far beyond that of most governments. Such omnipresence raises concerns about the real independence of markets and on any interference in national economic policies.
BlackRock having been mandated several times by governments-notably in the United States during the COVVI-19 crisis or in Europe as part of Relaunched Plans. This double function, both public advisor and private investor, poses the question: how to guarantee the neutrality of its political recommendations when the recommended sectors are often the same as those in which the firm is massively invested?
Blackrock, its impact and its founders: conclusion
Starting from a group of eight founders in 1988, including Larry Fink and Robert Kapito , BlackRock has gradually transformed into an essential infrastructure of global finance . Their initial vision - associate risk management and technology in the world of investment - has shaped a company that is no longer content to manage portfolios.
Today, BlackRock accumulates roles: key shareholder of thousands of companies , advisor for states , manager of public and private assets , but also provider of technological tools through its Aladdin platform. An unprecedented position of force, which raises growing questions about the nature and extent of its influence in the cogs of contemporary capitalism. At the origin of this ascent, assumed strategic choices ... but also a series of decisions where the border between private interest and public interest sometimes becomes unclear .
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Yohan Uzzan
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
