BlackRock’s ETF Business Thrives with Strategic Acquisitions and Revenue Growth

BlackRock’s ETF business continues to thrive, with Larry Fink’s acquisition of the iShares ETF business from Barclays being hailed as a legendary financial investment. Despite the initial skepticism surrounding the $13 billion purchase in 2009, BlackRock’s ETF business has experienced impressive growth in revenue, assets under management, and potential for further expansion.

Greggory Warren, equity strategist at Morningstar, highlighted that the revenue from BlackRock’s iShares equity and fixed income ETFs accounted for a significant portion of the company’s total revenue in 2023. Additionally, the assets under management for BlackRock’s ETF business have doubled over the past five years, positioning the company as a dominant force in the ETF market alongside competitors like Vanguard and State Street.

While the ETF business remains highly lucrative, there is increasing pressure to generate more revenue due to intense competition and fee constraints. BlackRock has ventured into new avenues such as the annuities business through the LifePath Paycheck program, designed to provide participants with lifetime-income options. Furthermore, BlackRock’s recent acquisition of Preqin reflects the company’s interest in expanding into private equity and exploring innovative opportunities for growth in the market.