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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. ]

SWFI First Read, September 21, 2018

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U.S. Public Becomes More Aware that Gmail Scans Emails

Alphabet is a major stock holding for sovereign wealth funds and large pensions. Search giant Google is under fire for allowing third-party partners and companies, like Return Path Inc and other advertisers, to share data from Gmail accounts. Many experts and tech observers already knew this, but more people in the public are becoming aware of Google’s practices when it comes to privacy. Google disclosed in a letter to U.S. lawmakers this finding. The Wall Street Journal reported that in some instances, app companies were able to read people’s emails in order to improve their algorithms. In 2017, Google said they would stop scanning all of one’s Gmail messages for the goal of personalized ads.

GPIF Infrastructure Exposure Almost Reached 200 Billion Yen in March 2018

Japan Government Pension Investment Fund’s (GPIF) exposure to infrastructure real estate was 196.8 billion JPY at the end of March 2018. At that period, 57% of the exposure was to the UK, 15% was to Australia, 15% to Sweden, 10% to Spain and 3% to Finland. 21% of GPIF’s infrastructure portfolio was linked to airports versus 27% to ports.

AIMCo-backed sPower Closes $498.7 Million Bond Deal

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Iceland Contemplates a Sovereign Wealth Fund

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The Government of Iceland is looking to possibly form a sovereign wealth fund to stabilize the country from unforeseen shocks to the national economy. The Iceland government released a statement saying, “The state’s contributions to the Fund will be equivalent to new revenues from publicly owned power production companies which are expected to accrue in the coming years.”

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CBRE Global Wins First GPIF Global Real Estate Mandate

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Japan Government Pension Investment Fund (GPIF) awarded its first global real estate mandate by hiring CBRE Global Investment Partners Limited. This is a global core real estate fund-of-funds separate account. Overseeing this mandate as a gatekeeper is Asset Management One Co., Ltd., which is a unit of Mizuho Financial Group. This RFP was launched in April 2017.

CBRE Global Investment Partners is the multi-manager arm of CBRE Global Investors.

In addition, on August 8, 2018, GPIF hired two custodians for short-term investments. These custodians are Trust & Custody Services Bank, Ltd and The Master Trust Bank of Japan, Ltd.

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