BlackRock went on an acquisition spree in the past few years to juice its growth in private markets, Wall Street’s hottest area.
But these days, with investors’ faith in that sector shaken, it is BlackRock’s steady, if less glamorous, public-markets business that has the company on stronger footing than rivals.
Every private-asset giant has taken a hit in the markets to some degree, but BlackRock is outperforming peers. That explains why the world’s biggest investment manager recently reclaimed a title it had ceded to one-time corporate cousin Blackstone for most of the past five years: Wall Street’s most-valuable publicly traded asset manager.
Unlike other firms fully focused on alternative investments, BlackRock has a public-fund business to fall back on—one that is taking in more than half a trillion dollars of new money a year and that has a record of growing through turbulent stretches in the market.
“One of the questions we continue to get with the alternative asset managers is, when it comes to private credit, the asset class has not been through a full economic cycle,” said Alex Blostein, a Goldman Sachs analyst who covers asset managers. “With BlackRock, you have a lot more visibility into how the business has performed in different environments, and I think that gives people some comfort.”
Before this year, explosive growth in private equity and private credit and the high management fees that came with it had put Blackstone and its peers ahead of rivals. The narrative on Wall Street has now shifted markedly.
Concerns over the outlook for private-credit funds, and the loans they made to midsize businesses with less-than-stellar credit, have clobbered the shares of Blackstone, KKR, Apollo Global Management, Ares Management and Blue Owl Capital, which until recently commanded premium valuations. Those stocks have tumbled by an average of 31% this year and are each among the worst performers in the S&P 500.
BlackRock has dropped 6.4%. While it is one of the biggest private-asset managers, its appeal to investors now is that it is also one of the biggest managers of just about everything else. Most of BlackRock’s revenue still comes from public stock and bond management.
The stock rose 4.5% Wednesday.
BlackRock is trading at a higher forward price-to-earnings ratio than most private-market competitors for the first time in years, and maintains a large valuation gap compared with traditional asset-management rivals like T. Rowe Price and Franklin Templeton.
Still, it isn’t clear how the drama in private credit will unfold. BlackRock will update investors next week when it reports earnings and may shed light on fundraising in its private-markets businesses.
In the core public-markets arm, BlackRock’s iShares exchange-traded funds remain its bread and butter. The company led the ETF industry with a record $527 billion of net inflows in 2025, and U.S. ETFs as a whole took in more money than ever this year through February. The steady flow of new money into ETFs, along with a technology business that sells risk- and portfolio-management software to other investment firms, are viewed as stable sources of revenue even in turbulent markets.
The Aladdin platform, which BlackRock bolstered with its 2025 acquisition of private-market data provider Preqin, is a key part of BlackRock’s ability to manage risk across both public and private assets. Aladdin’s growth is part of why activist-investing firm ValueAct announced it was taking a stake in the asset manager in February.
“BlackRock has historically been viewed as a diversified asset manager that’s really good at making ETFs,” ValueAct co-Chief Executive Officer Mason Morfit said on a February CNBC podcast. “But the interesting thing that piqued my attention in the last 12 months was that BlackRock is also one of the best data and software companies in the industry.”
BlackRock CEO Larry Fink showed Wall Street that he could build a huge business based on ultralow-cost funds, while staying profitable. But as private markets became a bigger share of U.S. capital markets, he began to look for opportunities in the sector to turbocharge fee growth.
His buying spree included a $12.5 billion acquisition of private lender HPS Investment Partners, which closed last July. As with the rest of the private-credit universe, HPS is now under a spotlight. BlackRock agreed to pay an estimated 35 times forward earnings for the firm, a premium price that was comparable with how private-credit manager Ares was valued at the time.
Shares of Ares have dropped about 40% since then, and valuations of other private-credit firms have also collapsed. Investors are concerned that the fundraising environment is set to get tougher.
BlackRock’s bet is that the private investment firms it acquired can benefit from its scale and existing client relationships and grow faster, and that big institutional clients like insurance companies and pension funds want to consolidate more of their assets with a single firm that can manage everything. The company says it is already seeing evidence of that.
“We’re bringing together asset management and technology across public and private markets,” Martin Small, BlackRock’s chief financial officer and head of corporate strategy, told The Wall Street Journal last month. “And clients are consolidating more of their portfolios with BlackRock.”
The jury is out on the acquisitions. When HPS announced it would limit withdrawals from a flagship private-credit fund on March 7, BlackRock shares tumbled 7.7%—erasing roughly as much market value as BlackRock had paid for the private lender. That is despite the fund posting a net inflow for the quarter, meaning new money coming in exceeded the redemption requests.
The foray into private assets may bring newfound volatility. But sitting on the sidelines was too much of a risk, Goldman’s Blostein says.
“BlackRock had to do some deals in private markets. It’s just too important of a growth area for the ecosystem for them not to have a meaningful footprint,” he said.
Fink and other BlackRock executives have communicated that they don’t think the current stock price is a fair reflection of BlackRock’s growth potential. The 73-year-old CEO told investors last year that it reminds him of the early days after he acquired the iShares business from Barclays in 2009.
“I wasn’t happy with the stock price after we did that transaction,” he said. “But once we proved that our whole was exponentially stronger than the parts, the stock broke out, and I believe that is going to be the case here.”
Write to Jack Pitcher at jack.pitcher@wsj.com