By Simon Jessop
LONDON – BlackRock said on Thursday it had agreed a deal with Baringa Partners to buy the consultancy’s climate-modelling technology for use in its Aladdin risk management system.
Aladdin, used by money managers running trillions of dollars in assets to help build portfolios and manage the investment process, is an increasingly important revenue driver for BlackRock, which itself manages around $9 trillion in assets.
Baringa’s modelling, meanwhile, is used by governments and financial services companies to manage climate risk and plan their transition to a lower-carbon economy.
The long-term partnership will see BlackRock, the world’s largest asset manager, acquire Baringa’s Climate Change Scenario Model and integrate it into Aladdin.
“Investors and companies are increasingly recognising that climate risk presents investment risk. Through this partnership with Baringa, we are raising the industry bar for climate analytics and risk management tools, so clients can build and customise more sustainable portfolios,” said Sudhir Nair, Global Head of the Aladdin Business at BlackRock.
The deal comes as a growing number of investors around the world pledge to align their portfolios with the global effort to cap greenhouse gas emissions by mid-century.
Financial details were not disclosed, nor were the terms of the partnership agreement.