When my partners and I founded BlackRock 34 years ago, we believed in a new approach to asset management: one that was grounded in robust risk management and guided by client needs. And every day since our founding, we’ve listened to our clients. We’ve tried to anticipate the impact of long-term trends and macro developments on their portfolios. And we constantly evolved to stay ahead of their needs.
In our effort to better serve our clients, we have continuously remade BlackRock, and in doing so, disrupted the industry. We did it by building and enhancing Aladdin as the foundation of our investment process. We did it by combining active and index onto one platform at a time when many believed a firm had to choose one or the other– even though our clients wanted both. We did it by bringing together public and private markets capabilities and providing our clients a comprehensive, whole-portfolio approach.
BlackRock’s clients are long-term investors – representing pensions, insurers, governments and ultimately individual savers – and we take a long-term approach to investing in our own business. As more clients turn to BlackRock, and as we have grown over time, we have been able to make strategic investments, innovate and enhance the value we offer them. We remain as committed to our purpose and principles as we were in 1988. That is why we are focused on providing more choice across our platform, enabling access to the growth of capital markets to more people, and continuing to use our platform to benefit all of our stakeholders.
Providing more choice across our platform
There were plenty of people who had doubts about what ended up being our transformational acquisitions of Merrill Lynch Investment Managers and Barclays Global Investors in the 2000s. These transactions enabled us to reach more clients around the world and to build whole portfolio solutions for our clients by offering diversification across asset classes, including equities, fixed income, alternatives and cash, as well as active and index under one roof. And all of these asset classes and strategies were also brought together on one technology platform, Aladdin.
Today, we continue to be incredibly focused on serving our clients not simply by selling one investment strategy or another but by looking at the entire portfolio and helping them identify strategies that fit their unique preferences and goals. This includes giving clients more choice for how they want to partner with BlackRock – from using one of our ETFs to outsourcing their entire investment portfolio to us. We are able to provide this level of choice to clients because we invested in our platform over time and rallied around a One BlackRock culture that discourages turf wars and rewards collaboration across teams so that we all stay focused on what’s best for the client.
That commitment extends to how we think about evolving for the future, including our work to expand client options for how they participate in proxy voting decisions. Much like asset allocation and portfolio construction, where some clients take an active role while others outsource these decisions to us, different clients are interested in different levels of involvement when it comes to casting proxy votes. After talking with our clients, we used new technology and other innovations to offer proxy voting choice. This is now available to institutional clients representing just over $2 trillion of index equity assets1, including public pension funds serving over 60 million people2. We see this as just a first step. Our ambition over time is to continue developing new technologies and working with industry partners to expand voting choice for even more clients.
The majority of our clients are investing to fund retirement. The people they serve are teachers, nurses, firefighters and factory workers who are saving for their futures. As people live longer and healthier lives, their risk of outliving their savings is accelerating the “silent crisis” of financial insecurity in retirement. That is why BlackRock is working alongside our clients and partners to address income in retirement. In the United States, we shared in 2021 that our retirement income solution, LifePath Paycheck, was being embraced by plan sponsors. Today, six large plan sponsors whose plans together represent over $10 billion in target date investments and more than 150,000 participants, have elected to work with BlackRock to implement our LifePath Paycheck solution as the default investment option in their US employees’ retirement plans, subject to necessary approvals and conditions. We remain committed to helping more people experience financial well-being in retirement.
Enabling access to the growth of capital markets for more people
“Choice” is an incredibly important aspect of our work with clients. But for many people around the world, the fundamental need is simply “access.” They simply don’t have the access to the capital markets that they need to begin shifting from saving to investing. I have long been an advocate for the power of investing over the long term. For example, 40 years ago, a 25-year-old who saved $10,000 in bank deposits would have approximately $50,000 today as he or she reaches retirement. In contrast, that same $10,000 would be worth over $800,000 today if it had been invested in a broad-equity index such as the S&P 500. That is the power of long-term investing. More people around the world need access to that opportunity, and providing them that opportunity aligns with BlackRock’s purpose.
We are using our global reach and expertise to improve access to long-term investing in more places than ever before. In Europe and Latin America, for example, where investors had traditionally only used bank deposits, BlackRock is helping to build a new culture of personal investing. In Germany, nearly 2 million people – triple the number two years ago – are using iShares ETFs to invest through ETF savings plans. And in Brazil, locally listed versions of US iShares are now accessible on third-party direct platforms for minimums as low as $10. This has allowed Brazilians looking for a more convenient and affordable way to invest in global markets to invest $1 billion through iShares in less than a year. And as commission barriers have come down around the world, hundreds of millions of people now have access to ETFs commission-free and are choosing to invest with BlackRock to access capital markets.
Providing high quality at good value: continuing to use our platform to benefit all of our stakeholders
As more clients turn to BlackRock and we have grown to as a global asset manager, we see significant opportunity to continue to use our market reach and scale to drive better outcomes for our clients and results for our shareholders.
Our global market reach and scale benefits investors – especially retail investors – by making it easier to access markets with greater liquidity and lower costs. Through our iShares ETFs, for example, we offer more than 1,200 funds globally – the most of any ETF provider – so our clients can access a diverse range of asset classes and exposures. It has allowed millions of new investors to access high-quality investment strategies at good value. More than 120 million people have invested an average of $50,000 each in our ETF and index capabilities3, and we have used the benefits of scale to help our clients save more than $500 million globally through fee reductions in our ETFs over the past five years4.
Our platform also enables us to invest in superior market quality, including liquidity, price discovery and efficiency, through proprietary data and analytics. And it allows us to diversify our service providers and implement more efficient trading strategies through multiple intermediaries and better technology.
Scale affords us other competitive advantages too. It allows us to create new jobs, both directly at BlackRock and indirectly through our partners and vendors, and benefit our shareholders as well. Over the past 5 years, we have generated an average 6% organic base fee growth and welcomed over 5,000 new employees to the firm while delivering 150 basis points of margin expansion5.
BlackRock’s willingness and ability to adapt and evolve have been critical to our growth over time. We went from serving a handful of clients in one country to thousands of clients in more than 100 countries. Our employees have grown from 8 to 18,400. And since our IPO in 1999, we have generated a total return of more than 9,000% for our shareholders, well in excess of broader markets6.
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