BlackRock vs. Blackstone: 6 Key Differences, Pros & Cons, (2024)

BlackRock vs. Blackstone: both are the biggest assets management companies in New York. These companies offer master limited partnerships, real estate, bonds, buying stocks, and many other facilities. But these companies are different from each other in many ways. The main difference between BlackRock and Blackstone is their investment strategy.

Let’s take a closer look at Blackstone versus BlackRock

Main Activity	BlackRock is fund management, while Blackstone is a private equity
Year Founded	BlackRock was founded in 1985, while Blackstone was in 1988
No. of Employees	BlackRock has more employees
CEO	BlackRock’s CEO is Larry Frink, while Stephen A. Schwarzman is Blackstone’s CEO

Table of Contents

What is BlackRock?

If we talk about BlackRock meaning, it is a Multinational company in America that is well known as the world’s largest asset manager due to its retail and fund management services. This company’s headquarters is in New York, with over 10 trillion in assets under management at the time of writing. BlackRock was founded in 1988 by employees of First Boston and Lehman Brothers, Most famous Larry Fink, who is the CEO of this company today. BlackRock does not have a limitation on investing, as it allows everyone to invest and deals in mutual funds. This is due to the higher accessibility of this company, which allows it to deal in large amounts of funds.

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What is Blackstone?

If we talk about Blackstone meaning, it is also an American Multinational company founded in 1985 by two Lehman Brothers employees, Schwarzman and Peterson. Initially founded as an M&A firm, it expanded into other areas, such as distressed business advisory, private equity, and real estate. Now Blackstone has $881 billion in asset management and is known as the largest private equity firm in the world. Blackstone investment aims to build a successful business with stronger communities and economic growth. However, this company has been criticized due to its connections with firms regarding the deforestation of the Amazon forest. Moreover, this company also has fewer employees as compared to BlackRock, which makes it smaller than that. But BlackRock does not beat it in capitalization, the primary criterion for the strength of a company.

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6 Key Differences Between BlackRock and Blackstone

Components	BlackRock	Blackstone
History	BlackRock began in 1988 when the financial management of Blackstone intended to provide asset management and institutional clients. The Blackstone CEO gave Flink and his team a five-million-dollar line of credit in exchange for a 50% stake in their company.	In 1992, Blackstone and Blackstone was one financial management with 53 billion dollars in their assets. In 1994 Fink and Schwarzman agreed to part ways on an international disagreement Financial, and Schwarzman sold his share of BlackRock.
Services	The accessibility that BlackRock has today allows it to have so many funds in management that anyone can easily invest through their products, whether individuals or institutions, through their range of iShares ETFs.	Blackstone, on the other hand, is a private equity fund, which means everyone cannot invest in them, reducing the number of potential clients. But this does not stop the success of the company.
More Powerful	If we compare BlackRock versus Blackstone, BlackRock has more than ten times the funds in their management. Which gives them great power when it comes to exercising voting rights with their companies.	Blackstone has fewer employees as compared to BlackRock, which makes it a smaller company due to its industry. But BlackRock does not beat it in capitalization, a primary criterion for the strength of a company.
Investors	BlackRock allows all types of investors to invest: from pension funds to retail investors and many other institutions.	It does not allow everyone to invest and only works with high-net-worthy people and financial companies.
Deals in	BlackRock deals in mutual funds, fixed-income assets, ETFs, risk management, etc.	Blackstone deals in private equity, Hedge Funds, and real estate.
Perks and Benefits	The BlackRock employees rated their Perk and Benefits 73/100, with Engineering and IT, two departments that have the higher rates.	Employees at The Blackstone Group rate their Perk and Benefits Score a 60/100, with IT as the department that rates their experience the highest.

BlackRock vs. Blackstone Similarities

Whether it is BlackRock or Blackstone, Both of these companies share the same history.
BlackRock was originally known as Blackstone in 1988. When both were one company with one financial management.

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BlackRock vs. Blackstone Pros and Cons

BlackRock Pros and Cons

Pros of BlackRock

BlackRock allows everyone to invest, and the investors don’t have to worry about buying and selling securities as the management does all the work.
BlackRock also provides tax advantages to multiple states with added benefits for Ohio residents.

Cons of BlackRock

BlackRock company has faced various short-term challenges like relative overpopulation and earning revisions.
Mutual funds at BlackRock ask you to invest a lot of money; in some cases, you can not invest less than $1,000.

Blackstone Pros and Cons

Pros of Blackstone

Blackstone works only with leaders and operators around the world to make the companies stronger and sustainable for the long term.
Blackstone company provides a lot of employee benefits like health insurance, maternity leave, and 401K insurance.

Cons of Blackstone

Blackstone has far fewer employees as compared to BlackRock, which makes it a smaller company as compared to that.
Blackstone only allows worthy people to invest in them, which means not everyone can invest in the company.

Comparison Chart

Comparison Video

Conclusion

BlackRock and Blackstone are both the world’s largest asset management companies which are working on the global level. These companies share the same history and deal with asset management. But if we look at BlackRock vs. Blackstone differences, both have different ways of investing and funding. BlackRock is a traditional asset management company that deals in fixed—income assets, risk management, and mutual funds. In contrast, Blackstone deals in Private Equity, Hedge Funds, and real estate. Another notable difference between these two companies is that BlackRock offers both open-ended and closed-ended investments, while in Blackstone, only close-ended investments are available.

It's clear that BlackRock and Blackstone, both New York-based asset management giants, have distinct but overlapping functions in the financial landscape. Let's break down the key concepts mentioned in this comparison:

BlackRock:

Main Activity: Fund management, dealing extensively in retail and fund management services.
Year Founded: Established in 1988 by former employees of First Boston and Lehman Brothers, notably by Larry Fink, the current CEO.
Size and Accessibility: Boasts over $10 trillion in assets under management, offering accessibility for large-scale funds.
Services: Deals in mutual funds, fixed-income assets, ETFs, and risk management, catering to a broad range of investors.

Blackstone:

Main Activity: Initially founded as an M&A firm, expanded into distressed business advisory, private equity, and real estate.
Year Founded: Started in 1985 by Lehman Brothers employees Schwarzman and Peterson.
Size and Focus: Manages $881 billion in asset management and is recognized as the largest private equity firm globally.
Services: Specializes in private equity, Hedge Funds, and real estate investments, targeting high-net-worth individuals and financial companies.

Differences between BlackRock and Blackstone:

Investment Strategy: BlackRock focuses on traditional fund management and retail investing, while Blackstone emphasizes private equity and deals with a select clientele.
Accessibility: BlackRock is more open to a wider range of investors, including individuals and institutions, while Blackstone restricts its investor base to high-net-worth individuals and specific financial entities.
Employee Base: BlackRock boasts a larger workforce compared to Blackstone, affecting their operational scale and capacity.
Investment Instruments: BlackRock offers both open-ended and closed-ended investments, whereas Blackstone primarily deals in closed-ended investments.
Services Offered: While both handle asset management, their core focuses and the types of investment vehicles they manage differ significantly.
Perks and Benefits: Employee experiences and benefits vary between the two, with differences in the ratings and offerings across departments.

The comparison delineates how these financial powerhouses diverge in their investment approaches, target clientele, and the range of services they provide. Each has its own strengths and areas of expertise within the broader realm of asset management.