Control Your Own Life

Written by Vijay Tadepalli

Student at Vellore Institute of Technology

We live in a society where everyone’s opinion matters, but what if it's a situation where all we do-see-listen is just an illusion of free will, no matter what country we live in? The big giants in the corporate world have all the power, but what if there is a company that rules all these big giants?

We've all used iPhones, heard of Starbucks, and tried McDonalds. There is one company that has an influence on nearly every brand you'll see in your daily life.

Larry Fink launched BlackRock in 1988, and it has since grown to become the world's largest asset management organization. BlackRock, which began as a risk management and fixed income institutional asset manager, played a critical role in the history of the financial industry. Under Fink's direction, the business extended its global footprint by pioneering innovative investment techniques and technologies that transformed the asset management industry. Today, BlackRock is well-known for its impact on financial markets and its dedication to long-term investing.

Common Misconception

We all might have heard about Blackrock and the news about it running the world, despite managing $10 Trillion worth of assets, they don't directly own the shares in fact they simply manage them.

BlackRock rose to prominence through its smart use of Exchange-Traded Funds (ETFs) and its expertise as a money manager. The firm recognized the potential of ETFs early on and quickly rose to the top of the market. Their iShares ETF business, which debuted in 2000, became a pillar of their success. ETFs provided investors with a low-cost and liquid option to obtain exposure to numerous asset classes.

BlackRock was positioned as a financial behemoth due to its competence in ETFs, effective money management, and devotion to innovation, making it the world's largest asset manager with a substantial influence on global financial markets and your daily life.

Pro ESG to Anti ESG

BlackRock has a significant impact on how businesses and governments tackle environmental, social, and governance (ESG) concerns such as climate change, human rights, and corporate ethics. BlackRock aspires to improve risk-adjusted returns and assist sustainable development by incorporating ESG elements into its investment decisions - being one of the early and loudest proponents of the term.

Adopting ESG principles means that corporate strategy focuses on the three pillars of the environment, social, and governance. This means taking measures to lower pollution, CO2 output, and reduce waste. It also means having a diverse and inclusive workforce, at the entry-level and all the way up to the board of directors. ESG may be costly and time-consuming to undertake, but can also be rewarding into the future for those that carry it through.

However, this year, Larry Fink stated that BlackRock will no longer be using the term ESG, but that doesn't change any of their actual functions towards improving the environment, sustainability, and governance.

AI - before it was cool

Early on, BlackRock made use of artificial intelligence (AI) via its Aladdin? platform, which stands for Asset, Liability, Debt, and Derivative Investment Network. Aladdin, which was created in the 1980s and has since been improved, is a complete investment management system that includes artificial intelligence and advanced analytics.

Aladdin AI was also essential in automating numerous areas of portfolio management, allowing BlackRock to extend its operations more efficiently. As a result of being at the forefront of technological innovation in the financial industry, the firm obtained a competitive advantage. Aladdin's strategic use of AI contributed considerably to BlackRock's development as a global asset management leader.

We will cover Part 2 in the next edition of our newsletter

Check It Out

Part 2:

- BlackRock's impact on the economy

- How their power can be controlled

- How far their power really reaches