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BlackRock’s Larry Fink: ‘Proud’ Aladdin made it as a tech start-up – Business Insider


  • BlackRock, which has crossed above the $7 trillion assets under management threshold, compared its analytics platform Aladdin to a startup on the firm’s fourth-quarter earnings call on Wednesday.
  • CEO and Founder Larry Fink told analysts that he was proud Aladdin will soon cross the $1 billion revenue benchmark. He cited stats from McKinsey that only 3% of tech startups reach that point.
  • The firm’s Aladdin platform is driving BlackRock’s massive growth in technology services revenue, which has more than doubled since 2014 and hit $974 million in 2019. 
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In Larry Fink’s eyes, Aladdin isn’t so different from a startup run out of a garage, funded by family and friends. 

BlackRock, the world’s largest asset manager with more than $7 trillion in assets under management, has publicly stated that it sees itself as a technology firm. Now, Fink is comparing Aladdin — BlackRock’s widely-used analytics platform — to a tech startup.

On the firm’s fourth-quarter earnings call Wednesday morning, Fink said he was “proud” Aladdin is close to passing the $1 billion mark in revenues, a threshold he said only 3% of tech start-ups hit, citing McKinsey stats. 

The firm’s technology services revenue has grown rapidly in the last half-decade, Fink said on the call, more than doubling since 2014. In 2019, the division accounted for $974 million in revenues, a vast majority of which can be attributed to Aladdin. 

Fink did not mention the Aladdin Studio, a new initiative the firm was hiring leadership for in mid-2019 that will allow clients to customize their Aladdin platform. The architect of the platform, Jody Kochansky, left the firm in November after 27 years at the asset manager. 

The desire to be treated — and valued — like a tech company is not unique to Fink and BlackRock. Jamie Dimon said on JPMorgan’s Tuesday earnings call with journalists that the bank should be valued like a tech company with a subscription-based revenue model, and has looked into building its own version of Aladdin. Charles Schwab has seen a surge in clients using its robo-advisor after adding a subscription model.  

While BlackRock’s technology services revenue has grown rapidly, it is still far from displacing the firm’s bread-and-butter as the main source of money — investment-related fees totaled nearly $11.8 billion in revenue in 2019.

And the firm does not break out how much it costs to upkeep the Aladdin platform, so it’s unclear how profitable the tech division is. The firm’s operating income as a whole was $5.5 billion in 2019, an increase of roughly $100 million compared to 2018. 

 Still, the firm envisions Aladdin taking over asset management technology in a way that Bloomberg terminals have come to dominate traders’ desks and Google runs search engine traffic. 

“Our long-term strategy is to provide technology for as much as much of the asset management value chain as possible and make Aladdin the language of portfolios,” Fink said. 



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