BlackRock Adds Features to Aladdin Platform
Aladdin executives believe they have updated the platform to efficiently provide in-depth risk analytics across every asset class, according to the Institutional Investor.
BlackRock added these new features in pursuit of additional market share in the portfolio management software market. Aladdin is short for Asset Liability and Debt and Derivative Investment Network. Last year, BlackRock purchased private markets data firm eFront. The platform started in the 90s as a bond portfolio evaluation tool and has been facing competition from other investment firms.
The update allows users to analyze asset class breakdowns of their current holdings and risk exposures. Users will be able to analyze the effects of events on different sectors or assets. This feature was only available for public equities and fixed income, but the new updates have added private assets into the mix.
“The trends of why we ultimately acquired eFront have only accelerated,” Sudhir Nair, global head of Aladdin, said. “We saw an increased importance in allocations to alternatives, but the current state of technology to support those private market exposures was far behind where they were in public markets. We believed there was an opportunity and increasingly a need to bring public and private markets together.”
Investors wanted a consolidated investment platform and Aladdin gives them just that. “As BlackRock moves toward the market demand for front-to-back solutions, their success very much hinges on integration,” SimCorp CEO Klaus Holse said.
Business development chief Tarek Chouman, eFront’s former CEO, stated that client reviews of the updates have been positive thus far. However, there are still issues with Aladdin’s operating system.
“The eFront capabilities are similar to Aladdin, but the asset classes are different,” Chouman said. “When you are buying a public company versus a private company – clearly it’s a different way of doing things. But wherever there is a similarity, where there is something that looks the same in public and private markets, we will try to operate those things in the same way.”
Furthermore, Aladdin executives have reported that the demand for a consolidated platform has only increased with the pandemic. “With the current crisis, there’s been a significant surge in client demand for risk assessment,” Chouman said.