Is it comparable to the "acquisition of iShares" strategy? BlackRock aims to "ETF-ify the private market"

Recently, BlackRock, the world's largest asset management company, has been acquiring private equity firms in succession, seemingly replaying its successful strategy from 15 years ago in the public market. Will it succeed this time? According to media reports on Monday, looking back to 2009, BlackRock acquired Barclays Global Investors for about $15 billion, which included the ETF provider iShares. This deal became a turning point for BlackRock's development, as the ETF business rapidly expanded, helping BlackRock grow into the world's largest asset management company, managing $11.5 trillion in assets today. In 2024, BlackRock has set its sights on the private equity market, successively acquiring Global Infrastructure Partners (GIP) for $12.5 billion, HPS Investment Partners for $12 billion, and private equity data provider Preqin for $3.2 billion, totaling nearly $28 billion. In contrast, the cost of acquiring BGI in 2009 was only $22 billion when adjusted for 2024 dollars. So, will these acquisitions in the private equity market also become another "once-in-a-lifetime" opportunity for BlackRock? Unlike in 2009, Wall Street is not currently in a post-crisis recovery phase; private equity assets are actually one of the hottest businesses. Although the acquisition costs are high, the management fees for private equity assets are much higher than those for public funds, especially passive ETFs. This also explains why the market capitalization of private equity giant KKR ($140 billion) is comparable to that of BlackRock ($162 billion), despite KKR managing only 1/18 of BlackRock's assets. BlackRock's Chief Financial Officer Martin Small stated: The company is not focused on the short-term gains from these transactions but is looking to expand capabilities and provide more value to clients, with just the insurance clients representing a market opportunity of $35-40 trillion. More importantly, BlackRock hopes to change the investment approach in the private equity market—by "indexing" private equity. Larry Fink stated when announcing the acquisition of Preqin in July: Just as indices have become the representative language of the public market, we envision applying the principles of indexing, even bringing iShares (BlackRock's ETF brand) into the private equity market, ultimately driving the "democratization of all alternative investments."