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BlackRock detailed its plans to grow in Asian markets, build up its alternative investments business, and expand its already massive iShares exchange-traded fund business in its first investor day since 2018 on Thursday.

The asset manager’s top executives appeared live from headquarters in New York and other BlackRock offices to run through a 149-slide presentation going over the most important facets of the business. 

During the three-hour investor day presentation, the firm emphasized that clients are increasingly looking to work with fewer asset managers.

“Clients want to work with a smaller number of players, of vendors, sometimes even just one,” said Mark Wiedman, head of international and of corporate strategy. “And while there is price pressure, the evidence is that the best firms can meet these trends and grow share and revenues.”

Enter: The “whole portfolio,” or the ways BlackRock is looking to advise clients on all facets of portfolios, like incorporating sustainability considerations or pinpointing risk through Aladdin. 

“The whole portfolio wraps up everything else in our strategy,” Wiedman said. “It’s a spirit, not a product.” 

Here are selected slides and other key points from BlackRock’s investor day.

BlackRock is expanding into China more aggressively than it has in the past.

BlackRock is the largest asset manager in the Asia-Pacific region, said Rachel Lord, who runs the firm’s operations there. 

Still, as China’s population is likely to become the world’s largest economy by the end of the decade, eclipsing the US, the firm sees upping its offerings there as a significant opportunity for the firm, Lord said. 

BlackRock is betting on more investors demanding access to the private markets.

“Private enterprises are staying private for longer, and in many cases, they’re staying private forever,” Edwin Conway, who runs BlackRock’s alternative investments business, said.

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Investors in recent years have searched for greater yield in private investments over public ones, and the firm has invested in its private offerings. 

Private markets are the fastest-growing area within the alternatives business, Conway said, with $100 billion raised in the last five years.

That has meant generally shifting portfolios away from the traditional 60% stocks, 40% bonds construction, and adding private investments into the mix.

It’s not just private markets. The firm is investing in its alternative investments unit more broadly.

“If you look at the institutional community alone, 80%-plus of them are telling us they’re increasing their alternatives allocations, but particularly to private markets,” Conway said.

Conway added that clients are “actively consolidating their managers,” and choosing to do “more with far fewer” because it’s easier work with one asset manager offering the same information and services at once. He said he sees that as an advantage for BlackRock, a “multi-wealth manager.” 

Pricing pressure is very real, Wiedman said.

“Price competition and price cautiousness are much more important than we were before,” Wiedman said in prepared remarks. 

In the past, clients would ask BlackRock about a product’s performance, he said. “Now, clients everywhere start by asking, ‘What’s the price?'”  

BlackRock and its competitors have cut fees on products like ETFs as clients’ tastes have shifted.

Earlier this year, the firm cut the …read more

Source:: Business Insider

      

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