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What Will BlackRock Look Like in 2030?

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Will BlackRock, currently the world’s biggest asset manager, be around in 10 years, or be overtaken in the exchange-traded fund market by tech companies like Amazon or Alibaba? Amazon is already in the online lending game. Amazon CEO Jeff Bezos once said, “Your margin is my opportunity”. Will Laurence “Larry” Fink still be CEO or at least Chairman of BlackRock? A lot can happen. BlackRock’s Aladdin is rubbing the lamp, calling on a genie to make its third final wish.

Over the past decade, BlackRock and the elite asset management community benefited handsomely from central bank measures such as quantitative easing, with the rapid creation of money flowing into listed equity markets. At the end of 2017, BlackRock topped US$ 6.29 trillion in assets under management, rivaling nearly the size of the whole sovereign wealth fund market. Can BlackRock get any bigger or at least reach US$ 10 trillion in assets by 2030? This open-ended question can be answered in many ways, but factors such as market access to China, India, and Southeast Asia will be crucial for BlackRock. In fact, SWFI research sees the Asia-Pacific region growing faster than the global AUM rates. BlackRock could be missing out on China, as players like Ant Financial offers products such as Yu’e Bao (Chinese for leftover treasure), a money market fund that was pushed out in June 2013 permitting Alibaba customers to use money leftover in their Alipay accounts.

By 2030, the United Nations predicts planet Earth will have 8.5 billion residents (more potential investors). Sovereign funds could be commanding nearly US$ 20 trillion in assets. Next, corporate boards across the United States, Europe, and Asia might have all but embraced some form of globally recognized ESG standards, inspired by nudgings from CalPERS, BlackRock, and the Swedish buffer funds.

BlackRock Will be Bloomberg

As incumbent financial industry consultants analyze products, regulatory changes, and asset flow patterns, many are missing out on BlackRock’s not-so-secret weapon. As certain financial products and services become cheaper, a key differentiating factor for these firms is technology, which can reduce labor costs, improve services, and reduce execution risks. In an uncompromising fashion, BlackRock continues to push its Aladdin solution on new and current clients in a bid to make quitting harder, while deriving more data insights from its octopus-like client reach. Armed with eleven data centers and more than 30,000 Aladdin users, BlackRock desires to ingrain itself into the workflow of every asset owner – small or big – knowing full well that ETFs and fund mandates can be lost in a whim. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Japan’s GPIF Awards Nissay Asset Management with ESG Disclosure Mandate

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Increasingly asset owners across the Asia-Pacific region are studying the impacts of environmental, social, and governance factors on listed companies. As more Japanese pensions augment asset allocation to listed equities, the importance of corporate non-financial disclosures and practices becomes clear. These disclosures can have a material impression on company stock prices. In addition, Japanʼs Stewardship Code and Corporate Governance Code in 2014 and 2015 were launched, respectively. These codes helped the (environmental, social, and governance) ESG concept gain momentum in Japan.

Japan’s Government Pension Investment Fund (GPIF), the largest public pension fund in the world, awarded a research mandate to Nissay Asset Management Corporation. The mandate entails studying ESG disclosures. The study will conduct a comparable analysis on ESG standards and practices, while taking into account input from both investors and companies. With around US$ 110.5 billion in assets under management, Nissay Asset Management is owned by Japanese life insurance giant Nippon Life Insurance Company.

As GPIF boosted its allocation to domestic equities, the asset owner took a deeper look into the impact of ESG on equity investing. GPIF is keen on improving efficiencies in Japan’s capital markets. GPIF is a universal owner of stocks, similar in some aspects to what Norway’s Government Pension Fund Global (GPFG) does.

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Norges Bank Real Estate Management Buys Central Paris Property

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Norges Bank Real Estate Management, the real estate unit of Norges Bank Investment Management (oversees Norway Global Pension Fund Global), has signed an agreement to acquire a 100 percent interest in an office property located on 54-56 rue la Boétie in central Paris.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Schlumberger Gets Closer to Eurasia Drilling Company

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Russia’s sovereign wealth fund, the Russian Direct Investment Fund, and American oilfield services giant Schlumberger (SLB) have planned a deal to invest in Russia’s Eurasia Drilling Company Limited. RDIF CEO Kirill Dmitriev made the announcement. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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