The world is growing more connected — and more demanding, according to Larry Fink, CEO and chairman of BlackRock. Technological innovation and globalization are driving opportunities for change, he wrote in his annual shareholders letter in April.
Change is an “essential component of human history,” he wrote, and to be successful, we must prepare for change with education, innovation and infrastructure.
For its part, BlackRock is doubling down on technology. The firm fired over 30 active equity managers in March, Bloomberg reported, shifting its focus to quant funds.
Active management at BlackRock has struggled for years. Its iShares business brought in a record $140 billion in net inflows last year, according to Fink, “capturing the No. 1 share of flows globally.”
He told attendees at the Morningstar Investment Conference in Chicago in early May that within the next five years, BlackRock will take in more revenue from software and technology than traditional money management, ThinkAdvisor’s Emily Zulz reported.
“Using technology is critical,” Fink said during the closing keynote session at the conference. “It’s critical for us as investors, as we’re spending more time analyzing new sources of data, spending more time creating algorithms on the new sources of data. We’re using technology to simplify and streamline the operation. And we’re using technology to be more connected with our clients to help with financial literacy, to help all our clients navigate all our clients’ money.”
BlackRock’s total AUM reached $5.1 trillion last year. Index funds and iShares accounted for 63% of that, or $3.2 trillion, compared to 29% of assets that were actively managed.