BlackRock is one of the biggest asset management companies in the world. It has close to $7.4 billion in assets under management, the highest in the world. It has scale, brand, and a vast network to compete effectively and continue growing its business. BlackRock also happens to be one of the biggest names in the passive and index-investing segments. Passive investing is currently the biggest theme in asset management and its further growth can be a tailwind for BlackRock over the medium to long term. Asset management firms are generally asset-light and hence have high ROC, ROE, and RoCE metrics. But in an increasingly competitive environment, scale and brand become important. These are some things that you may want to be aware of if you are looking for asset management stocks for long term holding.
What Is BlackRock Inc’s Background?
BlackRock is not a very old company. It was founded in 1988, about 3 decades ago. The founders were Larry Fink, Susan Wagner, Robert Kapito, Ben Golub, Barbara Novick, Ralph Schlosstein, Hugh Frater, and Keith Anderson. Together, these 8 founders sought out to offer asset management services to institutional clients. BlackRock eventually went public in 1999 when it listed on the NYSE at $14 per share. By 2004, the company had grown organically and through acquisitions and had assets under management of over $300 billion. This number jumped to $4.7 trillion by 2015. In 2020, BlackRock received approval from the Chinese regulators to set up mutual funds in China. BlackRock became the first global asset management company to get such approval. BlackRock is an important name among asset management company stocks.
Blackrock’s stock closed at $873 on 7th May 2021. The stock had risen by 8% over the preceding month, which is a significant gain for a monthly period. On a 1-year horizon, the stock was up 77%. Interestingly, BlackRock pays dividends since it is an asset-light business. On 7th May 2021, the stock was trading at a 1.89% dividend yield.