The March 28 announcement of what BlackRock chairman and CEO Laurence Fink described as a "repositioning of our active equity platform" amounted to a strong tilt toward information technology and data science, and hence a heavier reliance on what has long been one of the money management giant's strong suits: the Aladdin portfolio and risk management systems. Used by BlackRock and other firms that have bought it, Aladdin is "BlackRock's central nervous system," says Robert Goldstein. The firm's chief operating officer since 2014, Goldstein has since 2009 also been global head of BlackRock Solutions, the unit responsible for Aladdin, for which he began working at its inception in 1998. The 43-year-old says demand for the technology has never been greater Aladdin revenue increased 13 percent last year, and Fink has said that in five years, BlackRock could be getting as much as 30 percent of its revenue from technology, versus 7 percent in 2016 (when total revenue was $11.2 billion). As the firm explained in March, its investment in data science innovation "leverages the unique capabilities of Aladdin and strengthens the connections that quantitative and fundamental investors both need to distill unstructured information into investable insights."
BlackRock, which has an industry-leading $5.4 trillion in assets under management, took a bold step into robo-advising with the 2015 acquisition of San Franciscobased FutureAdvisor, subsequently forming partnerships with the likes of LPL Financial and U.S. Bank Wealth Management to make the capability available to individual investors through advisers. In June, BlackRock bought a minority stake in Scalable Capital, a European digital advisory platform. "We've been very focused on democratizing these technology capabilities," Goldstein explains.
Other initiatives include Aladdin Risk for Wealth Management, which provides intermediaries with risk management as well as portfolio construction and other capabilities; iRetire, an Aladdin-powered retirement planning platform for advisers; and iCapital Network, a venture BlackRock helped to fund, offering high-net-worth investors and their advisers access to alternative investments. All of these services will ultimately be integrated with Aladdin, says Goldstein, who earned a BS in economics from Binghamton University in 1994 and joined BlackRock that year as an analyst, at age 20.
The 2017 Tech 40Click below to view profiles