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BlackRock’s Private-Markets Expansion Could Change the Economics of the Company

BlackRock is already the largest asset manager in the world, but its latest expansion suggests that management is no longer satisfied with being known primarily as the company behind iShares exchange-traded funds and trillions of dollars in traditional portfolios. The firm is making an aggressive move into private credit, infrastructure, alternative investments, and financial data—businesses that could produce more revenue from each dollar under management than its massive index platform. That shift matters because BlackRock’s headline asset total has never told the entire economic story. Managing trillions of dollars in low-cost index funds creates enormous scale, but it does not necessarily produce equally enormous fees. An ETF charging a few basis points may attract billions in assets while generating less revenue than a much smaller private-market fund carrying a premium management fee and a share of investment performance. BlackRock’s push into private markets could therefore chan...

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