BlackRock is the world’s largest asset manager with over $10 trillion in assets under management. As one of the pioneers in quantitative investing, BlackRock operates a wide range of quantitative strategies and continues to invest heavily in developing new capabilities. This article provides an overview of BlackRock’s key quantitative investing platforms, the strategies they run, and the capabilities they are building.
BlackRock Solutions is the main quant investing platform
BlackRock Solutions is the primary platform for running systematic, quantitative strategies. It was started in 2000 and now manages over $150 billion in assets. Some of the flagship strategies include:
– Scientific Active Equity – Global and US long-only quantitative equity strategies that aim to outperform benchmarks through stock selection models and portfolio construction.
– Scientific Core Equity – Lower cost, systematic rules-based strategies that track equity benchmarks.
– Multi-Asset Strategies – Quant macro strategies across asset classes utilizing risk premia, sentiment indicators and other signals.
Acquisitions expanded BlackRock’s quant capabilities
BlackRock has made several acquisitions to expand its quantitative investing expertise:
– 2009 – Acquired Barclays Global Investors including its quantitative equity division BGI Capital Management. This added fundamental and macro systematic strategies.
– 2010 – Acquired the quantitative fund of funds division from Merrill Lynch.
– 2019 – Acquired eFront, a software provider for quant portfolio management and risk analytics. This bolstered Aladdin, BlackRock’s portfolio management system.
BlackRock continues investing in alternative data and AI
Looking to the future, BlackRock is focused on leveraging alternative data and machine learning in its quant processes. Some key initiatives include:
– Setting up a machine learning research lab to find new alpha signals.
– Launching Aladdin Data Cloud to centralize storage and access to alternative datasets.
– Partnering with external alternative data providers to test new datasets.
– Exploring natural language processing to analyze earning calls and other unstructured data.
BlackRock sees big potential in China’s quantitative market
China represents a major growth opportunity for quantitative investing and BlackRock is looking to capitalize through partnerships and new product development:
– Launched a joint venture with Temasek and China Construction Bank in 2019 – offers quant funds in China.
– Received license to fully operate its own fund management company in China in 2022.
– Developing new China A-shares quant strategies customized to the Chinese market.
As the largest asset manager globally, BlackRock has built leading capabilities in quantitative investing through both internal development and acquisitions. BlackRock Solutions and its flagship systematic strategies anchor the platform, which continues to expand into alternative datasets, machine learning and growth markets like China. With its scale and continued investment, BlackRock is positioned to be an innovation leader in quantitative investing.