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What’s up, everyone? Today, we’re discussing the difference between Blackstone and BlackRock!
Looking at some quick stats, we see that Blackstone makes more money than BlackRock with less AUM.
How can that be?
The companies are run by 2 different CEOs: Steve Schwartzman and Larry Fink. They’re 2 different men with 2 different opinions on how to run an asset management company.
Let’s compare some numbers…
- $880 billion AUM
- $110.8 billion market cap (what the market thinks they’re worth)
- $22.6 billion – 2021 revenue
- $10 trillion AUM (11X greater than Blackstone’s)
- $93.7 billion market cap (shouldn’t this number be larger?)
- $19.4 billion – 2021 revenue
Here’s the big question…
Why aren’t BlackRock’s numbers higher if they manage 11X more money than Blackstone??
Here’s what Lincoln thinks…
The public company, BlackRock, has a business model that is all about selling ETFs with an expense ratio of only 0.03%!
This low number means more money for the investors, less for BlackRock!
Blackstone had an interesting start (highly recommend reading King of Capital), but they ultimately stuck with private funds.
Their casual fee structure is 2/20. That means Blackstone charges a 2% management fee with an additional 20% fee on any profits made.
That’s a lot of money! How are they able to constitute that?
Blackstone works privately and they do all the busy work (getting deals, leveraging debt, selling, etc.).
This work is more risky but it’s obviously more rewarding.
However, BlackRock is obviously doing fine, their business model is just very different.
I hope you learned a thing or two about Blackstone and BlackRock!
That’s it for today!
Thanks,
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DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.
