Is BlackRock as Big as America Now? Maybe
BlackRock’s AUM hits $11.5 trillion, matching the U.S. government’s stash, and it’s not done yet
$11.5 trillion. Take a second, absorb that, or try.
BlackRock, the world’s largest asset manager, has officially reached a number so astronomical it rivals the U.S. federal government in sheer scale. After pulling in a record $221 billion in client cash last quarter, Larry Fink’s merry band of misfits have turned BlackRock into a financial empire unlike anything the world has ever seen. In fact, it might be rivaling the asset power of the world’s biggest superpower (not Citadel).
Seriously, by our math, BlackRock’s AUM looks almost identical to the U.S. Government’s. Now you want to keep reading, don’t you?
WHAT HAPPENED
BlackRock’s Q3 was a clinic in how to dominate global finance. The firm saw $97 billion flood into its ETFs, and $63 billion flowed into fixed income. All told, the firm has pulled in $360 billion in net inflows this year, already surpassing its full-year totals for 2022 and 2023. If that weren’t enough, BlackRock’s operating income spiked 26% year-over-year to $2.1 billion.
But it wasn’t just the traditional asset classes doing the heavy lifting. BlackRock raked in $5.5 billion in net flows for alternatives (it’s the world’s biggest buyer of Bitcoin), compared to outflows of $4.2 billion last year. It’s not a one-off either; after Q3 ended, the firm closed its $12.5 billion acquisition of Global Infrastructure Partners, bringing in $116 billion of private market assets.
The firm’s long-term investment funds pulled in $160 billion in net flows, smashing past analysts’ estimates of $100 billion. Meanwhile, they bagged another $61 billion in cash management and money-market funds. It’s like Fink decided to hold a garage sale, and the world showed up with minivans full of money.
Now, back to the thing about BlackRock’s AUM now being as big as the United States: we’re serious.
WHY IT MATTERS
Admittedly, comparing the U.S. government’s “AUM” to BlackRock’s AUM is like comparing apples to ETFs because one is managing client assets for profit, while the other is shuffling around trillions to keep the economy from imploding. But that didn’t stop us from trying.
To get to the U.S. government’s “AUM,” we stuck to the closest thing they’ve got to actual assets. We sifted through the piles of financial holdings and picked the categories that even remotely resemble what Wall Street would consider “assets under management.” We weren’t about to count things like national parks or fighter jets because we’re adults, and focused instead on the numbers that could realistically be called “assets.” The ones tied to real financial value, even if Uncle Sam isn’t exactly managing them with an eye on profit margins.
First up, we’ve got the Federal Reserve, that giant economic babysitter, holding onto a casual $8 trillion in Treasuries and mortgage-backed securities. You know, just some light assets they can shuffle around to keep the economy from spontaneously combusting. Think of it as their version of a mega hedge fund, except it’s trying to balance the dual mandate instead of leveraging ego to create Alpha.
Next, the Social Security Trust Fund weighs in with a hefty $2.8 trillion. It’s basically a bunch of IOUs that Uncle Sam’s going to cash out when your grandma needs her monthly check. Sure, it’s technically “assets,” but in reality, it’s more like the U.S. government holding a tab on future payouts. So, yeah, it’s a little less BlackRock, and a little more “we’ll figure it out later,” but in this thought experiment, it counts.
And then there’s the Thrift Savings Plan with $750 billion. It’s not exactly chump change, but compared to the Fed’s balance sheet, it’s like finding spare change in the couch. The TSP is the 401(k) for government employees, which means while the rest of us are watching our retirement accounts like hawks, federal workers are just kicking back knowing Uncle Sam’s got their backs.
So, yeah, according to our math, Fink and friends are now managing the same amount of assets as, like, America. $11.5 trillion… still trying to absorb that?
WHAT'S NEXT
So, what’s BlackRock doing now that it’s sitting on $11.5 trillion? Oh, you know, just casually planning to revolutionize the retail investing game by offering private credit through ETFs. BlackRock is about to let retail investors dip their toes into the same private credit waters normally reserved for hedge fund titans and pension fund managers. Why? Because it needs someone to take it.
This move to bring private credit to the masses via ETFs is either pure genius or utter madness. BlackRock is basically saying, “Hey, retail investors, want to play in the big leagues?” It’s a power move to cement their dominance in the fast-growing alternatives market while also juicing up their already booming ETF business (which, by the way, just pulled in $97 billion last quarter). It’s like Fink is handing out the keys to the private credit kingdom to anyone with a Robinhood account.
But, as always, with great power comes great… scrutiny. You think regulators are going to let BlackRock offer private credit to the average Joe without raising an eyebrow? Please. There are bound to be concerns about whether mom-and-pop investors should be gambling in the riskier corners of finance. That said, at $11.5 trillion AUM, it can afford to take some chances.