The Behemoth BlackRock’s Next Trillion Comes From Private Assets

Key Points

• BlackRock is the undisputed leading and largest asset manager in the world, with $11.6 trillion in assets under management (AUM).
• BlackRock’s Q4 revenues surged 22.6% YoY, marking the second consecutive quarter of record inflows at $291 billion.
• The company sees private assets as the future growth driver and has acquired three companies to expand its footprint.

The world's largest asset manager, BlackRock Inc. NYSE: BLK, posted another record year in 2024, with record inflows of $641 billion, amassing total assets under management (AUM) of $11.6 trillion. The finance sector behemoth continues to grow as it masterfully takes advantage of its enormous scale to bolster its revenue streams.

Its iShares ETF continues to be a growth driver. It’s also given Bitcoin investing legitimacy by offering one of the first major institutional ETFs of spot Bitcoin prices with its iShares Bitcoin Trust NASDAQ: IBIT, which regularly tops over 42.85 million shares a day in trading volume. BlackRock has nearly double the AUM of its two nearest publicly traded competitors, State Street Co. NYSE: STT and Invesco Ltd NYSE: IVZ.

The Advantages of Scale

BlackRock’s gigantic scale comes with many advantages, such as offering lower management fees as fixed costs are lower. BlackRock is also expanding into less liquid private assets, which include private equity, infrastructure and debt. Private assets are a future growth driver, and BlackRock has backed this belief with a number of multi-billion dollar investments.

Laying the Foundation for Private Assets Growth Driver

It acquired Global Infrastructure Partners (GIP) for $12.5 billion. It purchased private debt specialist HPS Investment Partners for $12 billion. The company is a leading investment firm specializing in private credit, direct lending, mezzanine financing, distressed debt, private equity and alternative investment strategies.

BlackRock tied this all together by acquiring Preqin, a data and analytics platform for the alternative investments industry, serving over 48,000 institutional and professional clients across more than 90 countries. Its robust dataset tracks private capital performance, deal flow, fundraising, and fund performance metrics through its research teams of over 500 analysts in Beijing, New York and Dubai.

BlackRock Stomps Q4 Estimates

For the fourth quarter of 2024, BlackRock's revenue rose 22.6% YoY to $5.68 billion, beating $5.58 billion consensus estimates. Approximately 14% of the revenue growth was driven by the positive impact of marketing on the average AUM, fees on AUM from the GIP transaction, organic base fee growth and higher technology service revenues and performance fees.

The company earned $11.93 per share, beating consensus analyst estimates by 69 cents. BlackRock saw $281 billion in its second consecutive record quarterly inflows. Full-year operating income rose 21% YoY.

BlackRock’s CEO Larry Fink commented, “Our record organic growth and financial results do not yet reflect the full integration or pending acquisitions of GIP, HPS, and Preqin. All three of these businesses have a track record of delivering strong revenue growth, profitability, and margin expansion. And we're steadily making organic investments ahead of the structural trends that we believe will drive outsized growth in the years ahead.”

BlackRock’s CEO Interview on CNBC: From Yields to AI Data Centers

BlackRock’s CEO Larry Fink was interviewed on CNBC shortly after its earnings release. Fink is cautiously optimistic about the markets and believes private capital can unlock growth but also create inflationary pressures. He believed the 10-year yield could rise above 5%, which would create conversations about debt and deficits.

Fink still believes the Fed will ease shortly and expects the yield curve to get steeper. Fink also believes the United States will need 300 gigawatts of power for its artificial intelligence (AI) data centers.

BLK Stock Is in a Rectangle Pattern

A rectangle is a consolidation pattern where a stock is trading below a flat-top upper trendline resistance and above a parallel flat-bottom lower trendline support. The stock will ping pong between the two parallel trendlines until it eventually breaks out through the upper resistance or breaks down below the lower support trendline.

BLK is chopping between the upper trendline resistance at $1,080.02 and the lower trendline support at $943.08, which are incidentally both Fib retracement price levels. BLK is chopping around the daily anchored VWAP at $1,004.97, currently trading under it. The daily RSI is chopping flat. (Fib) pullback support levels are at $943.08, $922.09, $892.22 and $874.43.

The average consensus price target is 14.94% higher at $1,120.67, and the highest analyst price target sits at $1,275.00. It has 10 analysts' Buy and two Hold ratings. The stock has a 1.09% short interest.

Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered calls at upside Fib levels executes a wheel strategy for income in addition to the 2.09% dividend yield.