BlackRock faces risks from market volatility (equity prices, interest rates, foreign exchange), competition, integration of acquisitions (Preqin, GIP), legal proceedings, technological changes, and potential failures of third-party providers. Unfavorable resolutions of legal proceedings and regulatory actions are also a concern. The value of investments in illiquid assets and those denominated in foreign currencies are susceptible to adverse market movements. The company's leverage ratio is capped at 3:1.
Financial Upside
BlackRock's revenue is increasing, driven by market conditions and organic growth in base fees and performance fees. Acquisitions of GIP and Preqin are expected to create a broader global infrastructure franchise and a preeminent private markets technology and data provider. Strong performance in certain investment products, particularly liquid alternatives, is contributing to the upside. Increased AUM is also a positive factor.
