BlackRock In-Depth Value Investment Research

【Fact】Revenue is generally recurring, but stability is not fully detached from "market direction." Most fees are tied to AUM, so rising markets, net inflows, and product mix upgrades all lift revenue; conversely, falling markets, client redemptions, and fee compression suppress revenue. The 10-K also clearly notes that changes in equity prices, interest rates/credit spreads, and exchange rates can reduce AUM and weigh on management fees. In other words, this is not a consumer staple whose volume is independent of the macro environment; it is a light-capital business with market beta sensitivity, but highly recurring client relationships and fee models.

【Fact】On cost structure, BlackRock is not a heavy-asset manufacturer. It has almost no inventory, and capital expenditure is light relative to revenue. 2025 capital expenditure was about USD 375 million, only a small fraction of 2025 revenue of USD 24.216 billion. The larger costs are compensation, equity incentives, sales and distribution, general and administrative expenses, acquisition-related expenses, and amortization. Therefore, the real variables to monitor are not plants and equipment, but fees, net inflows, product mix, talent costs, and M&A integration costs.

【Inference】If the stock market were closed for 5 years, I would be willing to keep owning it as a business owner, but with two conditions: first, I must accept that reported earnings will fluctuate with markets; second, the entry price cannot be too aggressive. After the quote is turned off, BlackRock would still collect recurring fees from pensions, ETFs, cash management, private funds, and technology/data contracts. The unsettling question is not "what happens without a quote," but "whether today's quote has already pulled forward the good news of the next decade."

Is This Business Understandable

【View】I rate BlackRock's "business understandability" at 4.5/5. The reason is that the core is not complicated: manage money for others and charge fees based on asset scale and service capability. The complexity sits in accounting and product structure, including consolidated investment products, deferred compensation hedges, large intangible assets and contingent consideration created by acquisitions, and valuation and recognition policies in private-market businesses. These accounting and structural complexities raise the threshold for reading the statements, but they do not turn the business model itself into a black box.

Industry, Competition, and Moat

Industry Position and Long-Term Demand

【Fact】BlackRock is not operating in a single industry, but across three overlapping tracks: traditional asset management, ETF/index investing, and private markets plus investment technology/data. Long-term demand is not fragile. Global ETF assets reached a new high of USD 21.91 trillion in April 2026. iShares managed USD 6.06 trillion, with a 27.7% share; Vanguard had USD 4.69 trillion, with a 21.4% share; State Street SPDR had USD 2.16 trillion, with a 9.9% share. The top three together accounted for 59% of global ETF AUM. This shows that the ETF industry has both long-term growth and clear concentration.

【Fact】The competitors are very clear. In low-cost index investing, Vanguard is the sharpest competitor, and its investor-owned structure naturally supports extremely low fees. Another strong rival is State Street Investment Management, whose AUM was about USD 5.62 trillion as of March 31, 2026. In traditional active management, BlackRock's own 2026 proxy lists AllianceBernstein, Affiliated Managers Group, Franklin Resources, Invesco, and T. Rowe Price as traditional comparable asset-management peers. In private markets and private credit, BlackRock faces more aggressive growth platforms such as Apollo, KKR, Blackstone, and Ares.

【Inference】So this is not a good industry "without competition." It is an industry where demand is sustainable over the long term, but profits differ greatly across sub-tracks. Pure beta exposure will keep being repriced lower; the platforms that can preserve high-quality profit are usually the largest in scale, strongest in distribution, deepest in system embedding, broadest in product line, and able to extend into private markets and technology. BlackRock belongs to this small group of survivors.

Does a Moat Exist

【Fact】BlackRock's moat has at least six layers. First, brand and trust: pension plans, insurance capital, sovereign entities, and large institutions do not casually award trillion-dollar mandates to second-tier brands. Second, scale advantage: the larger an ETF becomes, the stronger its liquidity, spreads, securities lending revenue, and fee competitiveness tend to be; iShares' leading share reinforces this loop. Third, channel and distribution advantage: retail clients are mainly reached through intermediaries such as banks, broker-dealers, and financial advisers, which means products must enter channels, adviser models, and platform lists, where BlackRock clearly sits in a strong position. Fourth, switching costs: once risk and investment operations systems such as Aladdin are embedded into clients' research, risk, trading, and compliance workflows, switching is not easy. Fifth, data and workflow advantage: Preqin strengthens private-market data. Sixth, regulatory and compliance capability: large global institutional asset management has extremely high compliance, risk-control, and operating requirements, which are difficult for smaller platforms to replicate.

【Fact】The company's strategic moves over the past year also reinforce these moats. In 2025, BlackRock completed the acquisitions of GIP, HPS, Preqin, and ElmTree. HPS brought about USD 165 billion of client AUM and about USD 118 billion of fee-paying AUM; Preqin strengthened private-market data; GIP strengthened infrastructure. These were not random cross-border purchases. They were pieces around the platform puzzle of "public funds/ETFs + private markets + data/technology."

【Inference】My judgment on the moat is: overall stable, locally widening. The core ETF moat is broadly stable, but because Vanguard exists, it is not easy to widen it materially. Technology and private-market capabilities may widen at the margin in coming years, because these areas demand more data, relationship networks, product design, distribution, and risk-control systems, and clients care more about "one-stop solutions." But note that this "widening" is still in the post-acquisition integration and validation phase. It is not yet an undisputed fact already reflected in results.

【Inference】This moat cannot be replicated by competitors in one or two years with a few hundred million dollars. Replicating iShares' global ETF share, institutional distribution system, pension relationships, Aladdin embedding and data ecosystem, and private-market fundraising and allocation network would realistically require many years, several billion to tens of billions of dollars of capital, and long-term brand accumulation. The real threat is not "sudden replication," but chronic fee compression and the risk that alternative asset-management platforms take pieces of high-margin business.

【Fact】BlackRock has also shown strong survivability in downturns. In the weak market of 2022, the company still generated about USD 17.9 billion of revenue, USD 5.2 billion of net income, and USD 4.4 billion of free cash flow. In 2025, although acquisition-related costs and amortization weighed on results, GAAP operating margin fell to 29.1%, while management's adjusted operating margin remained 44.1%. This suggests that its high margin is not merely a cyclical windfall. It is more a structural advantage of a platform asset manager.

【View】I rate "industry attractiveness" at 4/5 and "moat strength" at 4.2/5. It is a "good company in a good industry," but not an industry where victory is automatic. The industry is attractive because long-term capital pools are expanding, ETF penetration is rising, retirement and wealth-management demand persists, and private markets and technology services still offer structural opportunities. The industry is difficult because price competition, market sensitivity, and regulation are always present.

Management and Capital Allocation

Is Management Trustworthy

【Fact】Larry Fink has served as Chairman and CEO since 1999, and the 2026 proxy shows that he is 73 years old. This means BlackRock has strong cultural and strategic continuity, but it also means that over a "10-year-plus holding period," succession is not a distant worry, but a medium-term issue.

【Fact】Management and shareholders are not aligned through a controlling-owner structure, but there is still meaningful dollar alignment. The 2026 proxy shows that, as of March 31, 2026, Larry Fink beneficially owned or had an economic interest in a total of about 264,416 shares and related units of BlackRock common stock. All directors and executives together owned about 3.052 million shares, or about 1.92% of common shares outstanding. At the current rough price of USD 1,073 per share, Fink's economic interest is still in the hundreds of millions of dollars. The company also raised executive share-ownership requirements: USD 15 million for the CEO and USD 7.5 million for the President, and all NEOs exceeded the requirements by the end of 2025.

【Fact】Governance has positives and reservations. On the positive side, BlackRock clearly emphasizes linking executive compensation to long-term performance. The proxy discloses that more than 95% of regular NEO annual compensation is performance-based and at-risk pay. The reservation is that, although the 2026 shareholder advisory vote on executive compensation passed, the vote was 78,657,599 for, 42,362,921 against, and 212,514 abstentions, which is far from overwhelming support. Media reports have also noted persistent investor questions about the transparency of the compensation structure.

Is Capital Allocation Rational

【Fact】BlackRock's use of cash is broadly balanced: strategic reinvestment first, then dividends and buybacks. In 2025, the company returned a record USD 5.0 billion to shareholders through dividends and buybacks. The proxy also states that its dividend policy targets a 40% to 50% payout ratio and continued repurchases. In 2025, actual dividends/distributions paid were about USD 3.347 billion, and repurchases of shares/units were about USD 1.951 billion. In January 2026, the company announced an increase in the quarterly dividend to USD 5.73 per share, about 10% higher than USD 5.21 per share in 2025.

【Fact】Buybacks are not poor, but they are not "Buffett-style repurchases at clear undervaluation" either. In 2025, the company repurchased about 1.6 million shares and equivalent units at a cost of about USD 1.6 billion, implying an average price around USD 1,000 per share, very close to the current share price. This looks more like stable capital return and partial dilution offset than aggressive repurchases when the stock is "clearly below intrinsic value."

【Fact】The acquisition logic is industrially coherent, but the price is not light. In 2025, goodwill rose to USD 35.283 billion, and net intangible assets rose to USD 27.968 billion. Long-term borrowings were about USD 12.768 billion. In addition, the HPS transaction brought large contingent consideration liabilities. In other words, BlackRock is indeed using its balance sheet and equity currency to bet on an upgrade toward private credit, infrastructure, and data platforms. I agree with the strategic direction, but the final capital-allocation score must depend on whether these assets can turn into higher per-share cash flow over the next 3 to 5 years, rather than merely showing up as scale and accounting assets.

【View】I rate "management and capital allocation" at 3.7/5. I am willing to give them a medium-high score for being honest, capable, and long-term oriented, but not a full score. The reason is simple: strategically, they are broadly doing the right things; capital returns are stable; but repurchases have not clearly shown contrarian discipline, and the goodwill/intangibles created by acquisitions plus compensation-related governance controversy indicate that this is not a management team where capital-allocation discipline can be ignored entirely.

Financial Quality and Owner Earnings

Key Financial Quality

The table below focuses on core metrics from recent years that can be verified, covering earnings, cash flow, and the balance sheet. Because some FY2021 items were not fully shown in the historical summaries I found this time, certain fields are treated as "unknown" rather than force-filled.

Data note: Core figures for 2025 and 2026Q1 mainly come from BlackRock's 2025 Form 10-K and Q1 2026 earnings materials; multi-period historical summaries come from StockTitan's financial summary page. Since an asset manager's GAAP cash flow can be materially affected by consolidated investment products, the cash-flow judgment below is further adjusted using management's disclosure excluding the impact of CIPs.

【Fact】From 2022 to 2025, revenue rose from about USD 17.9 billion to USD 24.2 billion, with 2025 revenue up 18.7% year over year. But 2025 net income declined 12.8% year over year, mainly due to acquisition-related amortization, transaction costs, acquisition-related compensation, and changes in the fair value of contingent consideration. Management's 2025 adjusted net income was USD 7.736 billion, corresponding to adjusted diluted EPS of USD 48.09, clearly above the GAAP figure.

【Fact】Margins have not "collapsed," but GAAP margins in 2025 were clearly disturbed by acquisition accounting. 2025 GAAP operating margin was 29.1%, below 37.1% in 2024; management's adjusted operating margin remained 44.1%, close to 44.5% in 2024. This indicates that the underlying platform's profitability is still intact, while the accounting presentation was temporarily distorted by the 2025 strategic acquisition phase.

【Fact】The balance sheet is generally solid. At the end of 2025, long-term debt was about USD 12.768 billion, and unrestricted cash was about USD 11.007 billion. On this basis, net debt was only about USD 1.761 billion. Against 2025 EBITDA of USD 7.3 billion, net debt/EBITDA was about 0.24x. The 10-K also discloses that its credit agreement has a net leverage limit of 3.5x, while BlackRock was actually below 1x at the end of 2025. Using 2025 operating income of about USD 7.0 billion and interest expense of about USD 614 million, interest coverage was about 11.5x. For an asset manager, this is ample financial flexibility.

【Fact】Accounts receivable rose to about USD 5.2 billion in 2025, above USD 4.3 billion in 2024. The 10-K explains that this was mainly due to higher base fees, performance fees, technology/subscription revenue, and the impact of the HPS/Preqin transactions. Payables and accrued liabilities also increased, mainly because of higher accrued interest and other accruals. Given that this is a light-asset financial-services company in an acquisition-integration phase, I currently do not see an obvious working-capital red flag. It also has almost no inventory, so the risk of "inventory-piling false profit" is not relevant.

【Fact】Share count has two layers: One layer is common stock. At the end of 2025, common shares outstanding were about 155.07 million, broadly unchanged from 2024. The other layer is the Subco Units created by the HPS transaction. As of March 31, 2026, there were about 7.6 million units, which are economically close to potential one-for-one equity. In other words, although dilution in common shares appears limited, from a long-term owner's perspective, fully diluted economic shares are higher than the common-share count. This reduces the per-share intrinsic value you truly receive.

【Fact】On accounting quality, I did not find obvious evidence of financial fraud or aggressive accounting. The 2025 annual report includes Deloitte's unqualified audit opinion and discloses effective internal controls. The real issue is not "fake," but complexity: consolidated investment products (CIPs), deferred compensation hedges, large acquisition-created intangible assets, and contingent consideration can make GAAP earnings and cash-flow volatility look larger than the operating reality.

Owner Earnings Analysis

【Fact】Looking only at GAAP, BlackRock's 2025 operating cash flow was USD 3.927 billion, capital expenditures were USD 375 million, and free cash flow was about USD 3.552 billion. But this is not enough from an "owner's perspective" for an asset manager, because the 10-K clearly states that the cash flows of consolidated investment products (CIPs) distort GAAP statements. Management therefore also discloses cash flow excluding the impact of CIPs. On that basis, 2025 operating cash flow excluding CIPs was about USD 7.463 billion.

【Inference】Therefore, I would not mechanically treat USD 3.55 billion as "true distributable cash." A more reasonable method is to view 2025 owner earnings as a range: One end is a more conservative estimate, close to USD 6.0 billion, which starts from GAAP net income of USD 5.553 billion, only adds back more certain non-cash depreciation and amortization to a limited extent, and treats capital expenditure conservatively; the other end is a looser estimate, close to USD 7.0 billion, roughly equal to "operating cash flow excluding CIPs minus all capital expenditures." My conservative midpoint is USD 6.5 billion. This is not "precise truth," but a long-term owner estimate that balances accounting complexity.

【Inference】Using the economic share count of about 163 million shares as of March 31, 2026, conservative midpoint owner earnings are about USD 39.9 per share. The current price of about USD 1,073 per share equals about 26.9 times my estimated owner earnings. If I use the more conservative USD 6.0 billion, the multiple is about 29x; if I use the looser USD 7.0 billion, it is still about 25x. This is not a cheap-company valuation.

【View】So my answer to "are the profits real cash profits" is: broadly yes, but GAAP surface volatility cannot be used directly for conclusions. BlackRock's true cash-generating power is clearly better than the first glance at the GAAP cash-flow statement suggests. At the same time, equity incentives, amortization of acquisition-related intangibles, contingent consideration, and economic share dilution mean you cannot naively add back every "non-cash item." The most suitable valuation lens is not a single PE multiple, but a combined view of "adjusted earnings + cash flow excluding CIPs + fully diluted share count."

Valuation, Margin of Safety, and Opportunity Cost

Intrinsic Value Estimate

Below I use three valuation methods, but first note: For an asset-management platform like BlackRock, liquidation value is the least useful reference, because the truly valuable assets are client relationships, product channels, brand, system embedding, and organizational capability, not net plant and equipment.

Owner Earnings Discount Method

I use the "owner earnings range" discussed above, not accounting net income. The key 【Assumptions】 are as follows:

Using a fully diluted economic share count of about 163 million shares, my point estimates of intrinsic value per share are roughly: Conservative: about USD 560 per share; base: about USD 805 per share; optimistic: about USD 1,140 per share. These point estimates are not meant to create an "illusion of precision." They are meant to remind us that the current price of about USD 1,073 is already close to the optimistic scenario and clearly above the base scenario.

Based on this DCF, my range judgment is: Conservative intrinsic value range: USD 600 to 800 per share Reasonable intrinsic value range: USD 800 to 950 per share Optimistic intrinsic value range: USD 1,000 to 1,150 per share On this basis, the current price is roughly at a 13% to 34% premium to the "reasonable range." Only if you are willing to use more optimistic assumptions on private-market integration and technology-platform realization does the current price barely approach reasonableness.

Relative Valuation Method

【Fact】As of Tokyo time May 24, 2026, corresponding to the latest available U.S. market closing price around the May 22, 2026 close, BLK traded at about USD 1,073. Current PE multiples for traditional asset-management comparables are roughly: T. Rowe Price 11.1x, AllianceBernstein 11.8x, Affiliated Managers Group 12.4x, Franklin Resources 23.7x, and Invesco negative. Higher-growth alternative asset managers trade at higher PE multiples, with KKR around 32.0x and Apollo around 80.8x. BlackRock sits in an interesting position: it is clearly more expensive than traditional active managers, but cheaper than high-growth private-market platforms. This reflects the market's intermediate valuation of a "high-quality public-market/ETF leader + private-market/technology transformation potential."

【Inference】Using a rough fully diluted equity value: Current price of about USD 1,073 per share x 163 million shares = about USD 174.9 billion of equity value; relative to 2025 adjusted net income of USD 7.736 billion, about 22.6x adjusted PE; relative to 2025 shareholders' equity of USD 55.888 billion, about 3.1x P/B; relative to 2025 EBITDA of about USD 7.3 billion and near-neutral net debt, about 24x EV/EBITDA; relative to my estimated USD 6.5 billion of owner earnings, about 26.9x P/Owner Earnings. This set of numbers tells me that BlackRock is not "just a little more expensive than peers." Its valuation must be supported by higher quality, a stronger moat, and more private-market/technology optionality. The problem is not that the support is impossible, but that there is little room left for mistakes.

Asset or Liquidation Value Method

【Fact】At the end of 2025, BlackRock shareholders' equity was about USD 55.888 billion, while goodwill and intangible assets together were about USD 63.251 billion, already higher than shareholders' equity itself. This means that on a "tangible net asset" basis, BlackRock's tangible book value is effectively negative. In other words, this company is not suitable for using liquidation value as the main downside cushion. What you buy is a living platform that continuously attracts and serves clients, not an asset package whose machines can be dismantled and land sold.

Margin of Safety and Opportunity Cost

【View】I believe the current price offers an insufficient margin of safety. The most fragile valuation assumption is not "whether BlackRock will fail," but "whether private-market and technology upgrades can keep improving growth quality and sustain a high valuation multiple." If growth over the next 5 to 10 years falls short of market-implied expectations, margins fall due to fee compression, or the valuation reverts from a "quality platform premium" to a more ordinary asset-management valuation, shareholder returns may be mediocre even if the fundamentals remain healthy.

【Fact】Compared with opportunity cost, the current 10-year U.S. Treasury yield is about 4.59%, while the S&P 500's current trailing PE is about 32.19x, implying an earnings yield only slightly above 3%. BlackRock's annualized dividend is about USD 22.92 per share, for a dividend yield of about 2.1%. Based on my conservative midpoint owner-earnings estimate, its owner-earnings yield is roughly 3.7% to 4.0%. In other words, BLK is cheaper than the S&P 500, but it does not offer a particularly wide risk premium relative to the risk-free rate.

【View】So my answer to "is it clearly better than buying the index" is: not clearly at the current price. If you already have heavy exposure to the U.S. equity market and want to add a higher-quality platform stock that can benefit from the convergence of ETFs, wealth management, and private markets, BLK is worth tracking. But if the only choice is "BLK or the S&P 500," and you are balanced and conservative, I do not think BLK at the current price is strong enough to clearly win. Compared with the risk-free rate, it certainly has more long-term growth potential, but today's entry point does not give you a thick enough cushion.

Ideal buy price range: USD 700 to 850 per share Acceptable holding price range: USD 850 to 1,050 per share Price range I would consider clearly overvalued: above USD 1,150 per share The logic is simple: for a quality company like this, I am willing to tolerate it being "not very cheap"; but for balanced and conservative capital, I still want at least a roughly 15% to 25% discount around "reasonable value," rather than buying directly near the optimistic scenario.

Risks, Bear Case, and Checklist

Key Risks and the Strongest Bear Case

Competition risk. Vanguard's low-fee machine is still running; State Street remains strong in ETFs and index products; Apollo, KKR, Blackstone, and Ares have more "high-fee, high-growth" DNA in private markets. BlackRock's risk is not being defeated at one point, but suffering chronic erosion across several sub-tracks where it is either forced to lower prices or loses flow.

Technology substitution and platform risk. Aladdin/Preqin/technology subscriptions are part of the moat, but they are also sources of operating and reputational risk. BlackRock states clearly in its 10-K that cybersecurity incidents, third-party dependency failures, and disruptions to Aladdin could damage reputation and cause client losses.

Regulatory and political risk. Asset management itself is a highly regulated industry. Private credit has grown rapidly in recent years, and financial-stability regulators have already issued warnings about its vulnerabilities and potential systemic weaknesses. If BlackRock puts more of its future growth on private markets, this kind of regulatory and liquidity scrutiny will increase, not decrease.

M&A and integration risk. The combination of GIP, HPS, Preqin, and ElmTree is strategically coherent, but financially it has already appeared as large goodwill, intangible assets, and contingent consideration. If future fundraising, deployment, exits, cross-selling, or data monetization fall short of expectations, the premium investors paid for these acquisitions may prove too high.

Management and succession risk. Larry Fink remains the central figure, but he is already 73 years old. For a 10-year-plus investor, this is not something that can be ignored. On governance, say-on-pay support over the past two years also reminds us that the market does not view BlackRock's governance without reservations.

Overvaluation risk. This is the most realistic and most easily overlooked risk. Many investors dilute the importance of price because it is a "good company." But BlackRock today is closer to "a good company that is not cheap" than to "a good company that is clearly undervalued." This matters especially when risk-free yields are still above 4.5%.

Why This Investment Could Be Wrong

【Strongest bear case】 BlackRock may indeed be an excellent company, but the market already understands that: ETF leadership, global distribution platform, Aladdin, and private-market upgrades have almost all been written into the valuation. At the same time, its most profitable beta business will face long-term fee pressure, and the high-growth, high-fee phase of private markets may prove harder, slower, and more regulated than the market expects. If BlackRock ultimately changes from "an excellent public-market/ETF company" into "a larger and more complex asset-management platform whose per-share value growth is not impressive," the current price will not be attractive.

【What facts would overturn my current cautious view】 If the following facts appear over the next 2 to 3 years, I would admit that I was "too conservative" today: BlackRock sustains high-quality net inflows, rather than relying only on market appreciation to lift AUM; private-market and technology revenue shares rise meaningfully, and post-acquisition ROIC is clearly above the cost of capital; fully diluted owner earnings per share enter a firmer mid-to-high single-digit or higher growth path; and valuation does not expand much further.

【What facts would make me admit the bullish case is wrong】 If iShares' share keeps eroding, or if Aladdin/technology platforms experience client losses or major incidents; if private-market fundraising and deployment disappoint, or HPS/GIP/Preqin fail to show up in per-share cash flow for a long time; if the company continues using acquisitions to expand scale without increasing per-share value; if governance friction grows enough to affect capital-allocation discipline; any of these would overturn the core thesis that a high-quality platform can compound over the long term.

【Largest permanent capital loss scenario】 【Inference】If BlackRock's owner earnings over the next few years only land around USD 5.5 billion, and the market is willing to value it at only 16 to 18 times, the fully diluted value would be roughly USD 540 to 610 per share, implying possible downside of about 40% to 50% from the current USD 1,073 per share. This is not a prediction. It is a reminder that for high-quality companies, permanent loss often comes from buying at too high a price, not from the business suddenly deteriorating.

Investment Checklist

The core message of this checklist is very simple: business quality mostly passes; the price checklist does not.

Final Investment Conclusion

【Final Rating】 Watch

【One-Sentence Investment Thesis】 BlackRock is a high-quality global asset-management and technology platform with a deep moat and the ability to generate real cash flow over the long term, but buying at the current price looks more like buying excellence than buying cheapness for a balanced and conservative long-term value investor.

【Core Bullish Reasons】

• iShares remains the leader in the global ETF industry, with ETF AUM of about USD 6.06 trillion and a 27.7% share in April 2026, in an industry with high concentration.

• The business is not merely traditional asset management that "charges based on AUM." It also has the technology and data platform attributes of Aladdin/eFront/Preqin, which strengthen client stickiness and revenue quality.

• Financial leverage is low. Net debt was light at the end of 2025, actual net leverage was below 1x, and interest coverage was ample.

• It still maintained high profits and free cash flow in weak markets such as 2022, showing that the business is more resilient than many brokerages and investment banks.

• Management is making strategic upgrades around private markets, infrastructure, private credit, and data capabilities, and the direction is industrially coherent.

【Core Bearish Reasons】

• Current valuation is clearly not cheap versus traditional asset-management peers, and the margin of safety required by conservative investors is insufficient.

• The core beta business faces long-term fee compression, and high quality does not equal strong pricing power.

• Private markets and M&A integration will bring execution, valuation, regulatory, and liquidity risks.

• Goodwill and intangible assets are high, so the asset-based downside protection is weak.

• Larry Fink's age and recent executive-compensation controversy make management succession and governance real variables.

【Key Assumptions】

• ETF leadership is not materially eroded;

• Private-market and technology-platform revenue shares increase and translate into per-share value growth, not just total scale growth;

• Fee compression is partly offset by product mix upgrades, technology/data subscriptions, and private-credit/infrastructure businesses;

• Long-term returns on acquisitions such as HPS, GIP, and Preqin exceed the cost of capital;

• Growth in fully diluted economic shares remains controlled.

【Fair Buy Price】 I would be more willing to seriously consider adding shares in the USD 700 to 850 per share range, because that range provides a better 15% to 25% margin of safety and better matches a "balanced and conservative" risk preference. From the perspective of "acceptable but not cheap," USD 850 to 1,050 per share can be viewed as a holding range; above USD 1,150 per share, I would more clearly view the stock as overvalued.

【Target Holding Period】 At least 10 years. If you ultimately buy BlackRock, the correct holding logic is not to bet on next quarter's net inflows. It is to bet that over the next decade, global ETFs, retirement assets, wealth management, public-private-market convergence, and investment-technology platforms continue to expand, and that BlackRock remains one of the few platforms able to benefit from all of these curves at the same time.

【Expected Annualized Return】 This is a rough range based on the current price, not the ideal buy price:

• Conservative scenario: 3% to 5% per year

• Base scenario: 6% to 8% per year

• Optimistic scenario: 10% to 12% per year If you can buy at a lower price, the above ranges would move up meaningfully. If you insist on buying at the current price, what you are likely to receive is not "excess return from cheapness," but compounding from "time + business quality."

【Maximum Loss Risk】 If the combination of "private-market integration below expectations + sustained fee compression + the market assigning a normal asset-management valuation" occurs, a medium-to-long-term share-price decline toward USD 540 to 610 per share is not unimaginable, implying about 40% to 50% downside from the current price. The cause of that loss would not be the company suddenly losing profitability, but a reset of the high valuation attached to a high-quality business.

【Tracking Indicators】 I will focus on the following indicators in the future:

• Total AUM and net inflows, especially long-term net inflows, rather than AUM increases driven purely by markets;

• ETF share and iShares' market share in core categories;

• Growth in technology and subscription revenue, and the contract quality of Aladdin/Preqin;

• Private-market AUM, fee-paying AUM, and the conversion pace of uncalled and undeployed commitments;

• Adjusted operating margin and expense control;

• Operating cash flow excluding the impact of CIPs;

• Fully diluted share count including common shares and Subco Units;

• Acquisition-related intangible amortization, changes in contingent consideration, and subsequent ROIC;

• Repurchase price and repurchase scale within capital return;

• Management succession and governance signals.

【Signals That Would Trigger Reassessment】 If any of the following occurs, I would reassess the investment logic:

• iShares' core share shows continuous, structural loss;

• Aladdin/technology platforms suffer a major outage, client loss, or regulatory event;

• Private-credit and infrastructure fundraising/deployment materially disappoints;

• Goodwill/intangibles keep expanding while per-share cash flow does not grow;

• Succession arrangements remain unclear, governance controversy expands, and shareholder opposition to compensation or capital allocation rises significantly;

• In a high-rate environment, the share price keeps rising to a level that can only be justified by an even more optimistic scenario.

【Final Recommendation】 If you already hold BlackRock, my suggestion is not to rush to sell, but to treat it as a high-quality asset to hold while strictly monitoring price and acquisition execution. If you do not yet have a position and your risk preference is "balanced and conservative," I do not recommend ignoring price just because "this is a good company." For you, the better strategy is to keep tracking it and wait for a more comfortable entry point. A calmer closing line: BlackRock is worth owning for the long term, but it is not worth owning at any price today.

Open Questions and Limitations This report has prioritized official 10-K filings, Q1 2026 earnings materials, proxy disclosures, and authoritative market/industry data where possible. However, some FY2021 historical summary items were incomplete in the public summaries currently available, so certain 2021 table fields were marked as "unknown." In addition, because BlackRock is an asset manager, commonly used industrial-company metrics such as EV/EBITDA, ROIC, and P/B are inherently less comparable. This report has attempted to reduce error by using "fully diluted share count + cash flow excluding CIPs + adjusted earnings," but these valuations should still be treated as range judgments, not precise point estimates.

This report is based on public information and does not constitute investment advice. Markets carry risk; invest with caution.