Aladdin and eFront takeover drives 30% surge in BlackRock technology revenues

BlackRock completed its acquisition of eFront in May, combining the platform with Aladdin to bolster the system’s alternative investment capabilities.

Growth in investment operations platform Aladdin and the impact of the $1.3 billion takeover of alternative risk analytics provider eFront have driven a 30% surge in technology services revenue at BlackRock.

BlackRock acquired Paris-based eFront in May and combined its platform, which offers technology for due diligence and portfolio planning, performance and risk analytics, with Aladdin. The move bolstered Aladdin’s end-to-end processing capabilities in various alternative asset classes, providing clients a holistic view of their portfolio.

“eFront gives us a greater ability to penetrate in terms of illiquid alternative sales,” Laurence Fink, CEO of BlackRock, said on the asset manager’s third quarter earnings call. “The combination of eFront with Aladdin further reinforces Aladdin’s value proposition as the most comprehensive investment operating system in the world.”

BlackRock’s technology services revenue increased 30% year-on-year in the third quarter, totalling $259 million compared to $200 million last year. Total expense over the period at BlackRock increased 1% compared to last year, driven by higher compensation and the eFront acquisition. 

“Our technology services revenue grew 30% year-over-year as more clients are looking for holistic and flexible technology solutions to operate their businesses more effectively and more efficiently,” Fink added. “For institutions, Aladdin is an enterprise investment and risk management systems that power the entire investment process on one single platform.”

Gary Shedlin, chief financial officer at BlackRock, also commented that the asset manager will continue to invest in certain areas of the business in order to deliver more consistent growth organic revenue growth across market cycles.

“We remain focused on thoughtfully investing in our business for the long-term and capturing growth in areas of highest client demand. These include iShares… fixed income, sustainable, megatrend ETFs, illiquid alternatives, and technology where we continue to evolve Aladdin’s multi-asset analytics and portfolio construction capabilities,” he said.