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The Difference Between BlackRock & Blackstone

The Difference Between BlackRock & Blackstone

Blackrock and Blackstone are both asset management companies located in New York. You can buy stock, bonds, real estate, master limited partnerships, and more through an asset management company (AMC).

The significant difference between Blackrock and Blackstone agency is the clients and investment strategy.

Blackrock is mostly a traditional asset manager, emphasizing mutual funds, ETFs, fixed income assets, risk management, etc. On the other hand, The Blackstone Group is a purely alternative asset manager dealing with Private Equity, Real Estate, and Hedge Funds.

An image of bustling Wall Street New York
Both companies Blackrock and Blackstone deal with asset management.

If you’re interested to know more about these companies, stay with me.

The Blackrock Company

figures on a screen
BlackRock is a global leader in investing, advising, and risk management products.

BlackRock, Inc. is an American multinational investment management company located in New York.

In 1988, the company began as a risk management and institutional fixed income fund. It has $10 trillion in assets under management as of January 2022, making it the world’s largest asset manager. With 70 offices in 30 countries and clients in 100, BlackRock is operating globally.

BlackRock was founded by Larry Fink, Robert S. Kapito, Ben Golub, Ralph Schlostein, Susan Wagner, Hugh Frater, Keith Anderson, and Barbara Novick. They focus on providing asset management services for institutional clients from a risk management perspective.

BlackRock is one of the top shareholder companies in the trading business. However, it’s primarily criticized for its negative contribution to climate change, labeled as “the biggest driver of climate destruction.”

The Blackstone Group

Blackstone Inc. is a New York-based alternative investment company.

a person holding bills of money
. Blackstone transitioned from a public partnership to a C-type company in 2019.

It’s a leading investment company that invests money for pension funds, large institutions, and individuals. 2019 marked Blackstone’s transition from a public partnership to a C-type corporation.

In 1985, Peter G. Peterson and Stephen A. Schwarzman founded Blackstone, a mergers and acquisitions firm.

The name Blackstone was suggested as a cryptogram that combined two founders’ names. As the German word “Schwarz” means “black,” and the Greek word “Petros” or “Petras” means “stone” or “rock.”

Blackstone’s investments aim to build successful, resilient businesses because reliable and resilient companies lead to better returns, stronger communities, and economic growth for everyone.

However, Blackstone is criticized for its connection with firms regarding the deforestation of the Amazon forest.

Difference Between BlackRock And Blackstone

The BlackRock and Blackstone companies both work as asset management corporations. Most people get confused and consider them one due to their similar names.

There are slight differences between both. I’m going to explain these differences in the table below.

BlackRockBlackstone
It’s a traditional asset managerIt’s an alternative asset manager
It deals in fixed income assets, mutual funds, risk management, ETFs, etc.It deals in real estate, private equity, and Hedge Funds.
It caters to all types of investors – from retail investors to pension funds – and other institutions. It only works with High net worthy people and financial companies.
You can invest in both open-ended and closed-ended funds.It only has close-ended funds that have a lifespan of 10 years.
Differences between BlackRock and Blackstone.

Here is a short video explaining the difference between both companies.

How Blackstone makes more money with less AUM

Who came first? BlackRock or BlackStone?

Blackstone was started three years before BlackRock in 1985, while BlackRock was initiated in 1988.

Both these firms were first working under the umbrella of Blackstone Financials. Three years later, when Lary Fink thought of starting his own company, he wanted it to have a name beginning with the word “Black. ”

So, he named his company BlackRock, which is now one of the biggest asset management companies in the world and has surpassed its parent company.

Are BlackRock and Blackstone related to each other?

The Blackstone and BlackRock were related in the past, but they aren’t now.

Their names are similar for a purpose. They have a common history. In reality, BlackRock was originally known as ‘Blackstone Financial Management.’

Larry Fink approached Blackstone co-founder Pete Peterson for initial capital when he and BlackRock’s other co-founders came up with the concept of starting a business to provide asset management services with a special focus on risk management.

It began its work in 1988, and by the end of 1994, its assets and Blackstone financials reached $50 billion.

At this point, both Schwarzman and Lary Fink decided to separate both organizations formally. The latter organization was named BlackRock.

Who is a bigger company: Blackstone or BlackRock?

BlackRock has grown more prominent with time than its parent company, Blackstone.

Blackstone is the parent company of BlackRock. The Blackrock spun off from it in 1988. Over time, the BlackRock company grew many folds. Compared to its parent company, it has reached 9.5 trillion USD through asset management.

Final TakeAway

  • Blackstone and BlackRock are both asset management companies working on a global level. They both deal in asset management.
  • BlackRock is a traditional asset management company specializing in fixed-income assets, mutual funds, risk management, etc. In contrast, Blackstone deals in real estate, private equity, and Hedge Funds.
  • BlackRock company entertains investors – from retail investors to pension funds – and other institutions. On the other hand, Blackstone only works with High net worthy people and financial companies.
  • Another notable difference between companies is that BlackRock offers both open-ended and close-ended investments while Blackstone offers only close-ended investments.

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