What is BlackRock?
BlackRock is the world’s largest asset manager, overseeing $12 trillion in assets. The common misconception is that BlackRock's success is primarily due to superior trading strategies or performance.
In reality, 65% of BlackRock’s assets are invested in passive indices and ETFs that require no trading skillset. Whereas out of 35% of the assets invested in active funds; more than 70% underperformed their respective benchmarks.
Today, the traditional investment management business is a commodity offering — any company more or less offers the same product and has access to similar talent, know-how, and algorithms.
There are 3 main factors that make one stand out from the competition:
BRAND: Despite BlackRock’s relatively unsuccessful active management performance and heavy focus on passive indices, it is still the largest asset manager in the world and continues to attract more capital. Its brand inspires trust, which enables distribution and ultimately drives its assets under management (AUM).
ACCESS TO TOP TALENTED MANAGERS: Access to elite managers like Citadel or a16z is not something every firm can claim. Platforms that offer access to the crème de la crème of investment managers hold a competitive edge. The ability to tap into this exclusive talent pool sets the best platforms apart from others.
ACCESS TO TOP TALENTED FOUNDERS: In private investments, identifying and backing exceptional founders can yield game-changing returns. Companies like Google, Facebook, Uber, Sky Mavis, and Virtuals Protocol have generated 1000x returns. While this may not be as critical in public investments, in private investments, it can make all the difference.
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