Growth Strategy Focused on Private Markets, Technology & ETFs
BlackRock is aiming for substantial growth by focusing on higher multiple, less market-sensitive products such as private markets, technology, and exchange-traded funds (ETFs). The firm’s 2030 goal is to generate more than $35 billion in revenue, $15 billion in operating income, and double its market cap to $280 billion. Larry Fink, the company’s CEO, is confident these targets are achievable and realistic.
5% Organic Growth Target and New Businesses
At the recent investor day, Fink highlighted the company’s organic growth target of 5% base fee growth. This ambitious target comes with a plan to raise $400 billion in private markets by 2030. BlackRock has already met its 5% organic growth target over the last five years, and even in tough market conditions, the firm continues to pursue its growth strategy by expanding into key areas such as private markets and technology.
Private Markets to Drive Future Growth
Private markets and technology contributed to 20% of BlackRock’s revenue in 2024, and with the acquisition of HPS Investment Partners, private markets are expected to account for more than 30% of total revenue. In December 2024, BlackRock announced its $12 billion acquisition of HPS, which will create a robust private credit franchise. These deals highlight BlackRock’s deepening focus on private markets and its commitment to becoming a top player in this space.
Strategic Acquisitions and Investment in Private Markets
BlackRock’s aggressive expansion in private markets includes acquiring Global Infrastructure Partners (GIP) and Preqin, a private markets data provider. The firm plans to integrate Preqin’s data with its Aladdin platform and eFront investment management software to enhance its private markets capabilities. Small investments from clients in private markets could unlock $150 billion in new assets for BlackRock, with potential base fee growth of over $1 billion.
Alternatives Gaining Traction
As alternative investment strategies continue to grow, 91% of investors are expected to increase their holdings in alternatives in the next two years, according to Brown Brothers Harriman’s Private Markets Investor Survey. Fink emphasized that BlackRock’s focus on private markets will position the company as a top-five alternatives provider, complementing its leadership in retirement services and technology.
Focus on Whole Portfolio Solutions
BlackRock is also committed to delivering whole portfolio solutions that integrate public and private markets seamlessly. This approach is powered by BlackRock’s Aladdin technology, which has become crucial in managing diversified portfolios for clients across asset classes. The goal is to cater to asset owners who prefer working with comprehensive platforms rather than monoline product providers.
Private Markets Investor Survey
Brown Brothers Harriman’s survey of institutional investors and wealth advisors revealed a growing interest in private asset strategies, with many feeling under-invested in this area. BlackRock’s strategic initiatives in private markets are well-timed to meet this demand and position the firm for long-term growth in the sector.
