What is Blackrock? Understanding the World’s Largest Asset Manager

Index fund investing has transformed the stock markets over recent decades, enabling anyone to access a diverse segment of the market via a single instrument. However, despite the diversity of market access they offer, just three big firms dominate around 80 percent of index investing – Vanguard, State Street, and the largest, Blackrock.

Blackrock issues and manages the iShares group of funds and operates software called Aladdin, which helps clients manage their investment portfolio. The company has also become a leader in the issuance of Bitcoin and Ethereum-backed ETFs.

History of Blackrock

Blackrock was founded in 1988 by a group of financiers, some of whom are still executives with the firm today. Co-founder Larry Fink serves as chairman and CEO and frequently acts as a spokesperson for the company, while another co-founder, Robert S. Kapito, is company president.

The company was founded to provide risk-assessed asset management services to institutional clients. It started with an initial funding injection of $5 million and became profitable within a few months.

In 1999, Blackrock went public, and over subsequent years, it underwent significant growth both organically and due to mergers. For example, in 2004, the company acquired State Street’s Research & Management holding company, which included the firm’s mutual fund business.

In 2010, Blackrock acquired the Barclays Global Investors unit of Barclays Bank, which included the iShares ETF business. By 2014, Blackrock had become the world’s largest asset manager.

In 2024, Blackrock expanded its offering into cryptocurrencies, issuing regulated ETFs following a landmark decision by the Securities & Exchange Commission to allow such products on the US markets. It’s now the biggest issuer of crypto-backed ETFs.

Blackrock products and services

Blackrock generates revenue from several sources, including investment advisory and administration fees for the assets it manages. The company’s products are divided into investments, under the iShares banner, and investment software, called Aladdin.

iShares

Following the acquisition of iShares from Barclays Bank in 2009, Blackrock has grown iShares to be the largest issuer of ETFs in the world. Most of the funds are index-based, meaning they simply track the performance of the index itself without any active management, allowing investors relatively low-cost access to a diverse range of investments.

iShares funds cover a wide array of assets. Stock market ETFs issued by iShares are listed on major stock exchanges worldwide, including the New York Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, Australian Securities Exchange, and more. Besides stock-based funds, iShares also issues funds based on bond and commodity indices, as well as crypto assets.

Blackrock crypto ETFs

In 2024, Blackrock established itself as the leading issuer of crypto-backed ETFs once it became legal to issue such products in the US.

On January 10, 2024, the US Securities & Exchange Commission approved a raft of applications for spot Bitcoin ETFs from various issuers, including Blackrock. Bitcoin ETFs began trading shortly thereafter, and within around a week, Blackrock’s iShares Bitcoin Trust (IBIT) was the first to attract over $1 billion in funds.

Since then, Blackrock has solidified its position as a leading issuer of crypto-backed ETFs. As of December 2024, IBIT held over $48 billion and is over twice the size of its nearest competitor, the Grayscale Bitcoin Trust. This performance makes it one of the top ETFs to launch in 2024 out of around 700 products.

In March 2024, Blackrock launched a tokenized US money market fund on Ethereum, dubbed the Blackrock USD Institutional Digital Liquidity Fund or BUIDL.

In July 2024, the SEC approved the launch of Ethereum ETFs, including Blackrock’s iShares Ethereum Trust ETF (ETHA.) By December 2024, ETHA held $2.25 billion worth of assets.

Aladdin software

Aladdin is an institutional investment management software developed and managed by Blackrock. It offers several features, including a unified view of an entire asset portfolio across all public and private markets. It also offers risk analytics to help support investment decisions and features generative AI tools to make it easier and more efficient for users to find answers and access information.

Institutional users of Aladdin include asset manager Franklin Templeton, the Bank of Israel, and Microsoft, the latter for its Treasury division.

Blackrock essentials

• Blackrock is a US investment company that issues ETFs under the iShares brand, including products backed by stocks, bonds, commodities, and crypto.
• The company is the largest asset manager in the world, holding around $11.5 trillion.
• In 2024, Blackrock’s crypto products, the iShares Bitcoin Trust and the iShares Ethereum Trust, became the largest crypto ETFs in the world, following the respective approvals from the US SEC.