Our Business

BlackRock serves institutional, retail and high net worth investors in more than 100 countries through the efforts of professionals located in 27 countries. We strive to leverage the breadth of our global investment expertise and scale, together with our deep understanding of local requirements and business customs, to serve our clients most effectively. Portfolios may be invested in local, regional or global capital markets. Products may be structured to address location­-specific issues, such as regulations, taxation, operational infrastructure and market liquidity, and client-specific issues, such as investment policy, liability structure and ratings.

Our organizational structure and culture facilitate strong teamwork globally across both functions and regions in order to enhance our ability to leverage best practices to serve our clients and continue to develop our talent. The global functions – Portfolio Management, BlackRock Solutions ("BRS"), Global Client Groups and Corporate & Business Operations – are key to driving coordination and consistency and to further enhancing the benefits of our scale. The regions – Americas, EMEA and Asia­-Pacific – support local clients, employees, regulators and business strategy. At December 31, 2011, 44% of our AUM was managed for clients outside the United States and 43% of employees were based outside the United States. We expect these figures to approach 50% over the coming years.

Global Clientele


At year-­end 2011, assets managed on behalf of clients domiciled in the Americas (defined as the United States, Caribbean, Canada, Latin America and Iberia), totaled $2.123 trillion, or 60% of total AUM, down $54.0 billion, or 2%, since year-end 2010. Net new business in long-term products of $54.7 billion was insufficient to overcome outflows of $69.4 billion from cash and advisory and $29.2 billion in market valuation losses.

During the year, we served clients through offices in 30 states in the United States, Canada, Mexico, Brazil, Chile and Spain. Offerings included closed-end funds and iShares traded on various local stock exchanges, a full range of open­-end mutual funds, collective investment funds, common trusts, private funds and separate accounts. The long-term product mix is well diversified with 53% in equities, 37% in fixed income, 7% in multi­-asset class and 3% in alternatives. Cash management products predominantly serve clients in the Americas. We also provide a wide variety of BRS services for institutional investors and governmental entities in the United States and Canada.

The mix by investment style is also balanced, with 39% of long-term AUM managed in active products, 35% in institutional index accounts and 26% in iShares at year end. These iShares figures are based on the jurisdiction of the product rather than the underlying investor. Non­-U.S. investors often prefer U.S. iShares, primarily due to the depth of the markets and liquidity of the products.

Europe, Middle East, Africa ("EMEA")

AUM for clients based in the EMEA region ended the year at $1.027 trillion, or 29%, of total AUM, an increase of $11.1 billion from year-end 2010. During the year, clients awarded us net new business of $23.5 billion, including inflows from investors in 19 countries across the region. Our offerings include fund families in the United Kingdom, Luxembourg and Dublin, and iShares listed on stock exchanges throughout Europe as well as separate accounts and pooled investment products.

Clients invested across the entire product spectrum with 46% of long-term AUM in equities, 43% in fixed income, 9% in multi­-asset class and 2% in alternatives at year end.

EMEA clients constituted 30% of our cash management products and 11% of our advisory AUM. BRS has steadily built its presence in EMEA, serving a variety of institutional investors with Aladdin services and winning Financial Markets Advisory ("FMA") engagements for financial services companies and official institutions, including assignments for the Central Bank of Ireland and the National Bank of Greece.

The EMEA mix by investment style is slightly more concentrated than in the Americas, with 36% invested in active products, 53% in institutional index accounts and 11% in iShares. The relatively higher percentage in institutional index is driven by low-­fee institutional liability hedging portfolios, which account for approximately 20% of total institutional index assets. The relatively lower percentage in iShares primarily reflects the earlier stage of development of the European exchange traded product ("ETP") market and our lower installed share.


Clients in the Asia­-Pacific region are served through offices in Japan, Australia, Hong Kong, Singapore, Taiwan and Korea, and joint ventures in China and India. At December 31, 2011, we managed $362.3 billion of AUM for clients in the region, a decrease of 1%, or $5.3 billion, from year-end 2010. Net new business of $5.7 billion was offset by $2.3 billion of unfavorable market movements and $8.7 billion of BGI merger­-related outflows.

At year ­end, the mix of long-term products managed for these clients consisted of 43% equities, 47% fixed income, 4% multi­-asset class and 6% alternative investments. Asia-­Pacific clients represented 2% of our advisory AUM and less than 1% of our cash management products. BRS serves a select number of the largest and most sophisticated investors in the region. We continue to grow our presence in the region with the addition of our first two multi­-asset Aladdin assignments in Japan.

The Asia-Pacific mix among investment styles was tilted more toward institutional index accounts than in the other regions, with $221.0 billion, or 62%, of long-term AUM in these products. This bias can be traced to the presence of very large governmental institutions and pensions that are heavy users of index products. Asia­-Pacific institutional investors also use iShares for tactical allocation, but often favor the liquidity of the U.S. products (which are counted in Americas iShares). Active mandates represented 36% of AUM managed for investors in the region at year end.

© Copyright 2012 BlackRock, Inc. All rights reserved.

This is an interactive electronic version of the BlackRock 2011 Annual Report to Shareholders. The contents of this version are qualified in their entirety by reference to the printed version. A reproduction of the printed version is available in PDF here.


Opinions expressed throughout this annual report are those of BlackRock, Inc. as of March 2012 and are subject to change.

BGI Transaction

On December 1, 2009, BlackRock acquired from Barclays Bank PLC all of the outstanding equity interests of subsidiaries of Barclays conducting the business of Barclays Global Investors ("BGI") (the "BGI Transaction").

Adjusted and As Adjusted Results

Diluted earnings per share, operating income, operating margin, operating cash flow and net income are presented on an "as adjusted" basis. See pages 28-30 of the PDF for Explanation of Use of Non-GAAP Financial Measures.

Other Revenue

On the Financial Highlights page Other Revenue includes BlackRock Solutions and advisory, Cash management base fees, Investment advisory performance fees, Distribution fees and Other revenue.

Operating Margin Peer Average

Source: SNL, as of December 31, 2011; Market-cap weighted peer average includes: BEN, IVZ, TROW, LM, AMG, FII, EV, WDR, JNS, CLMS, CNS, GBL and PZN.

Performance Data

Past performance is not indicative of future results. The performance information shown is based on preliminarily available data. The performance information for actively managed accounts reflects U.S. open-end and closed-end mutual funds and similar EMEA-based products with respect to peer median comparisons, and actively managed institutional and high net worth separate accounts and funds located globally with respect to benchmark comparisons, as determined using objectively based internal parameters, using the most current verified information available as of December 31, 2011.

Accounts terminated prior to December 31, 2011 are not included. In addition, accounts that have not been verified as of January 30, 2012 have not been included. If such terminated and other accounts had been included, the performance information may have differed substantially from that shown. The performance information does not include funds or accounts that are not measured against a benchmark, any benchmark-based alternatives product, private equity products, CDOs, or liquidation accounts managed by BlackRock's FMA group.

Comparisons are based on gross-of-fee performance for U.S. retail, institutional and high net worth separate accounts and EMEA institutional separate accounts and net-of-fee performance for EMEA based retail products. The performance tracking information for institutional index accounts is based on gross-of-fee performance as of December 31, 2011, and includes all institutional accounts and all iShares funds globally using an index strategy. AUM information is based on AUM for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund as of December 31, 2011. The information reported may differ slightly from that reported previously due to the increased number of accounts that have been verified since the last performance disclosure. BlackRock does not consider these differences to be material.

The source of performance information and peer medians is BlackRock and is based in part on data from Lipper Inc. for U.S. funds and Morningstar, Inc. for non-U.S. funds. Fund performance reflects the reinvestment of dividends and distributions, but does not reflect sales charges. S&P 500® Index is a widely recognized, unmanaged index of common stock prices of industrial, utility, transportation and financial companies in U.S. markets.

Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed rate bond market.

Net New Business and Net Inflows

Unless stated otherwise, 2011 net new business and net inflows figures are before giving effect to a total of $28.3 billion in BGI merger-related outflows. These outflows reflect manager concentration considerations prior to third quarter 2011 and outflows from scientific active equity performance prior to second quarter 2011. BGI merger-related outflows totaled $121.0 billion in 2010 and $2.9 billion in 2009. Total merger-related outflows since the December 2009 BGI transaction represent less than 9% of acquired assets under management.

Market Share of U.S. Long-Term Mutual Fund Flows

Source: SimFund, as of December 31, 2011; Data is for U.S. long-term open-end mutual funds and excludes ETFs and funds of funds.

BlackRock Data Points

Debt ratings, AUM, ETPs offered, number of countries and employee data as of December 31, 2011. All other data reflect full-year 2011 results unless otherwise noted. BLK Total Return Performance vs. Peers - Source: SNL. Reflects full year 2011 results and assumes reinvestment of all dividends. Market-cap weighted peer average includes: BEN, IVZ, TROW, LM, AMG, FII, EV, WDR, JNS, CL MS, CN S, GBL and PZN.