BlackRock, the world’s largest asset manager, has started to assess how the plumbing underpinning the crypto market can be applied to its traditional money management business — the latest sign that big name fund groups are getting serious about digital assets.
“We’re exploring it at the moment,” Stephen Cohen, head of BlackRock’s business across Europe, the Middle East and Africa, told Financial News.
“The biggest impact on asset management over time will not be crypto as an asset class — although we can debate back and forth about that. The more interesting discussion is about the technology being developed in the crypto and digital assets world and how that will have an application to the traditional asset management world.”
One area the $8tn asset manager is exploring is tokenisation — where shares or units in an investment fund are digitally represented and can be traded and recorded on a distributed ledger.
“Tokenisation is about trying to give more people access to investments. That will be the ultimate goal,” said Cohen. “There is a valuable opportunity over time for the industry.”
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According to Cohen, BlackRock’s work on identifying opportunities in the digital assets arena is at the “early stages”, but has involved discussions with banks, custodians and pure play digital assets players.
“We have a team focused on it that works across the firm. We’re very aware that we don’t have all the answers,” he said.
BlackRock’s Aladdin platform, which counts other asset managers, banks, pension funds and insurance companies among its clients, is already central to its digital assets push in the US.
“We’re doing a lot of internal research and we think Aladdin can play a very central role in that,” Cohen said.
A tie-up between BlackRock and Coinbase in August means institutional clients can access the digital assets market via connectivity with Coinbase Prime, the crypto exchange’s prime broker platform.
BlackRock is not the only asset manager to have recognised the potential benefits of tokenisation. In July, Schroders announced it had bought a minority stake in Forteus, a blockchain and digital assets-focused asset manager, in a move that it said could eventually enable it to offer tokenised funds to investors.
Forteus will offer a range of investment solutions spanning customised portfolios of external managers, yield generation, actively managed thematic portfolios and — over the long term — tokenisation.
Meanwhile, the Investment Association, the trade body that represents the UK’s asset management sector, earlier this year called on regulators to approve blockchain- traded funds.
Abrdn is also bullish on digital assets. Stephen Bird, CEO of Abrdn, told FN in August that tokenisation, digital assets, digital exchanges and blockchain technology would “transform asset management for cost, speed and control reasons”.
READ Abrdn boss Stephen Bird plots digital assets push
In September, BNP Paribas Asset Management’s chief executive told FN it was also focused on tokenisation, rather than providing investors access to crypto.
“We are not involved in cryptocurrencies and we don’t want to be involved. For us, it’s about using blockchain technology to access tokens and improve liquidity of some products,” Sandro Pierri told FN.
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To contact the author of this story with feedback or news, email David Ricketts
