With institutional capital’s flight from hedge funds into the private equity sector, expect bl...
BlackRock: Assets, Infrastructure and ETFs
08/31/2017 2:56 am EST
BlackRock is led by CEO Laurence Fink, who has overseen a string of major acquisitions in recent years, expanding into private equity, real estate, energy, and hedge funds as investors look to diversify beyond stock and bond funds.
Fink engineered a blockbuster merger with Barclays Global Investors in 2009. The merger nearly tripled BlackRock’s assets under management and propelled the company to the top of the international money management industry.
BlackRock does not engage in proprietary trading. Clients include pension plans, governments, insurance companies, mutual funds, endowments, foundations, and charities.
BlackRock serves 21 out of the 25 largest endowments and foundation organizations in the US. It also serves around 90 of the Fortune 100 companies, and more than 90% of the largest US retirement plans.
In 2015, BlackRock agreed to buy Bank of America’s $87 billion-money market fund business, boosting its global cash-management business by 30% to $370 billion in assets under management.
In 2016, BlackRock Real Assets added to its wind generations holdings with the purchase of GE Energy Financial Services’ 50% interest in the Grandview wind project in Texas.
In 2017, BlackRock acquired First Reserve Energy Infrastructure Funds with $10 billion under management. The acquisition will help connect BlackRock’s clients with energy infrastructure projects.
BlackRock is a compelling value trading at 17x next year’s consensus EPS estimate of $25. But don’t take it from just us.
One of the world’s best hedge funds, Third Point, just bought the stock and believes BlackRock is a “misunderstood franchise” with a massive 38% market share of exchange-traded funds.
Third Point’s CEO said he thinks this acceleration in ETFs is just getting started and BlackRock is valued like a traditional asset manager, but it has much greater potential for structural revenue growth and operating margin expansion.
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