Meet Aladdin

Now celebrating its twenty-fifth birthday, asset management firm BlackRock's investment platform remains an unrivalled tool in the finance world
Technology at an asset management firm

Aladdin, or Asset Liability and Debt and Derivative Investment Network to give it its full name, is at the centre of everything BlackRock does. As a testament to its importance throughout the firm, it's often referred to by employees as BlackRock's "central nervous system", with $14 trillion dollars (£8.7 trillion) processed and monitored by Aladdin.

Making life simple

"Aladdin allows us to accomplish as much of our business as possible on one platform, which means we're all looking at the same information globally," explains Managing Director Thomas Fortin. Getting everyone on the same system, whether they're managing portfolios in Europe or Asia, is quite a feat, but Aladdin manages to make it seem effortless.

"There's a consistency across all Aladdin's apps," Managing Director Anthony Eggington tells us. "You can look at any one and recognise it in the same way you recognise parts of Microsoft Office. However, instead of four or five apps it's thirty to forty, which all do something different."

This complexity distinguishes Aladdin from the competition. "You could buy a piece of software from some vendor that could do any of the components in Aladdin," Thomas points out. "What you can't buy elsewhere is the combined package."

For many BlackRock employees, Aladdin has become an essential feature of their working life. Antony highlights a system called Race as a perfect example. Race allows traders worldwide to apply an investment strategy to one fund or a hundred funds with an equal number of mouse clicks. "That's scalability; that's where you really change the game in terms of how much one portfolio manager can do."

Increasing the amount someone can achieve in a day helps keep BlackRock ahead of the competition. "Most other asset management firms are worried about a hundred portfolios," says Anthony. "We're worrying about ten thousand."

The crown jewels

At BlackRock, everyone from junior analysts to the chief executive understands how critical technology is to the firm's business, so much so that this year they're holding a company-wide "hackathon" event, allowing every employee to indulge their inner programmer.

"It's a bit Google-esque," Anthony confesses, "but the buy-in and enthusiasm it generates is huge. It's a testament to the fact everybody here is very technical. Everyone's got an affinity with geekiness!"

The important role of technology is underlined by the fact that BlackRock, unlike other firms, turns a profit from its technology division. More than $500 million in annual revenue is generated by selling Aladdin to over 50 of the world's largest financial institutions.

"On the surface it would seem a bad idea because we're giving away our crown jewels," Thomas says, "but the reality is quite different. Aladdin is the collective intelligence of everyone who uses the platform, so everyone who comes into touch with Aladdin makes it better." Plus, as Thomas points out, technology can only get you so far; firms that buy Aladdin still need the right quality of staff and business culture to succeed.

Working on BlackRock

BlackRock's focus on technology and innovation ensures life as a developer at BlackRock avoids what are sometimes regarded as the downsides of a technology job, such as having to spend time on maintenance rather than development.

"Our developers are in the luxurious position of being able to develop rather than being drawn into day-to-day support," Anthony tells us. "It means developers concentrate on what they find interesting and get to focus on adding value, which is what they want to be doing. With development work, you're making people's working lives better and with that comes the feeling you've accomplished something."

Thomas compares the development atmosphere at BlackRock to that of technology giant Apple. "Just like Apple, we're innovative but also disciplined. Without any discipline, you'll end up with thousands of systems. With discipline, you get one platform for which people are developing new things, not redeveloping the same thing over and over again."

Constantly evolving

Over the years, more and more features have been added to Aladdin, often in direct response to clients' needs. "One of our clients was much more into derivatives than BlackRock was at the time," explains Thomas. "We built derivative capability into Aladdin to support that client even though we were doing very little derivatives trading then. Two years later, we needed to start trading derivatives on a large scale and the system was already there."

This constant evolution of what Aladdin is capable of doing wouldn't be possible were the platform not efficiently designed. "Many places have legacy systems," explains Thomas, "which nobody can understand how they work. With Aladdin, we can open it up, re-engineer it from the inside out and keep moving, which very few firms could do."

Given this ability to constantly adapt and evolve, the future for Aladdin and BlackRock is an enticing prospect. "Aladdin is going to be better in trading, better in alternatives, better in its user interface," asserts Thomas. "You name it, we're going to push the envelope."

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