Is BlackRock Pivoting Its Business Like Andreessen Horowitz?

Robo-traders


Here is another huge financial titan modifying its long standing business to gain exposure to cryptocurrencies. This time it’s BlackRock (the giant of indexing) which is reorganizing itself to place more emphasis on alternative assets (they generate higher fees) AND opens the door to “nontraditional” assets such as bitcoin (cryptocurrencies). Just a few weeks ago super venture capital firm Andreessen Horowitz completely pivoted its business to drop VC and become a Registered Investment Advisor (RIA) so as to be able to invest directly in cryptocurrencies and digital assets.

BlackRock, being the biggest asset manager on the face of the earth, will undergo a massive management reorganization to focus on alternative investments. This is just another systemic shift in the institutional investment landscape to gain access to the crypto asset sector. By the way, BlackRock now has a Digital Wealth team in place to implement the reorganization. Look for a few more crypto “non-believers” to go into hiding. More below.

Bill Taylor/Fintek Capital


“As news circulates that indexing giant BlackRock is reorganizing itself with an emphasis on higher-fee alternative assets, a few are beginning to believe that bitcoin could ultimately find its place among these nontraditional assets.

Change comes slowly to institutional investors like pensions funds. In the 1950s and 1960s, pensions mostly shunned stocks in favor of bonds. Today, virtually every retirement account has an equity allocation. Pensions, insurance companies and endowments have become huge buyers of riskier exotic investments, from hedge funds and private equities to global real estate, commodities and venture capital. Since 2008, U.S. pension fund investments in alternative assets have ballooned from 7% to 20% of total assets, reaching $7.6 trillion in 2017.

On Tuesday, BlackRock, the largest asset manager in the world with $6 trillion under management, said it would undergo a massive management overhaul, in part reorganizing to focus on alternative investments. And while BlackRock declines to comment on any plans for large forays into crypto assets, it recently hired former Ripple product marketer Robbie Mitchnick to its Digital Wealth team, which uses the firm’s successful Aladdin global asset management software to build institutional portfolios…”


Full Story at Forbes.com