BlackRock wants to make its Aladdin risk-management system the ‘language of portfolios’ for the entire asset management industry in the next 5 years

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  • BlackRock’s five-year plan for its widely used risk-management platform Aladdin is for it to become the “language of portfolios,” COO Rob Goldstein said on the firm’s earnings call on Thursday morning.
  • Goldstein referred to it as the firm’s “tech 2025” plan, and it would provide a common language for the asset management industry, which Goldstein says is currently lacking.
  • Aladdin, which just last quarter CEO Larry Fink compared to a tech start-up, grew its revenues 13% year-over-year, Goldstein said.
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In BlackRock’s last earnings call, CEO Larry Fink compared Aladdin — the widely used risk-management platform at the world’s largest asset manager — to a start-up.

On Thursday morning’s call to discuss first-quarter results, the firm revealed its plans for Aladdin to become the “language of portfolios” for the entire asset management industry. 

Aladdin, which experienced record volume during the last seven weeks of the quarter, has grown its revenues 13% year-over-year, as technology services revenue grew to $274 million for the quarter, according to the firm’s earnings release.

Rob Goldstein, the firm’s COO, said on the call that the platform was the main reason the firm has been able to continue to operate with 95% of 16,000 employees working from home. 

“Aladdin was built for these times,” Goldstein said. 

The risk-management platform counts more than 250 institutions as its clients, the firm said on the call.

Clients like pensions, insurance agencies, and other asset managers use the system to manage risk in their portfolios and improve the efficiency of the under-the-radar operations of investment management, like trading and compliance. According to an Institutional Investor article from last year, Aladdin has more than $18 trillion in assets on its platform.

The plans for the future of the platform are ambitious. According to Goldstein, BlackRock’s “tech 2025” plan is focused on making Aladdin the common language for the asset management industry — something he says the industry lacks. The goal is for the platform to be able to build portfolios with components from both the public and private markets. 

“BlackRock operates as a technology company,” Goldstein said, despite the firm’s $6.5 trillion in assets under management. 

Another focus of the asset manager’s five-year tech plan is improving its artificial intelligence efforts and data science. Goldstein said the AI lab started its work roughly 18 months ago with the goal of “finding more alpha signals in data.”

“We’ve always thought of the asset management business as a data-processing business.”

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