BlackRock Pushes Aladdin09.25.2017
BlackRock, the world’s largest asset manager, is aiming to aggressively expand the reach of its Aladdin risk and operations platform, though there concerns about the product having an outsized influence on global markets.
Financial News reported that BlackRock’s Asset Liability and Debt and Derivatives Investment Network has more than 85 asset-manager clients managing an aggregate $18 trillion on the platform, citing BlackRock. The New York-based firm, is pinning much of its hopes for the future on the product.
As spelled out by BlackRock CEO Larry Fink earlier this year, Aladdin and the wider solutions business it sits in, along with BlackRock’s other technology products, will account for 30% of total revenues in five years, more than quadruple the 7% current level.
But as FN reported, some have raised concerns about Aladdin’s widespread adoption potentially having too much influence on global markets, its hefty price tag, and the wisdom of asset managers integrating their investment data with a rival’s.
Questions about Aladdin’s potential influence on global markets center around its scale and complexity. Aladdin holds detailed information relating to every asset or security “in the investable universe”, the company said. Inside Aladdin is an application called Security Master, which lets users choose any of the assets available on the platform and evaluate them according to diverse and even seemingly-unrelated factors that could affect their performance. Crunching this data has long been part of investment analysis, but Aladdin’s ability to analyse in real time how a huge number of discrete factors affect an asset’s valuation is leaps and bounds ahead of what any human portfolio manager could do, according to FN.
Richard Turner of Insight Investment sees more automation and more transparency around cost and outcomes.
The suite enables GAM to seamlessly manage market risk exposure and liquidity and investment risk.
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