Since our founding 33 years ago, BlackRock has approached change with courage, humility and a goal of staying ahead of our clients' needs. We've taken bold actions like combining active and index onto one platform, developing and commercializing enterprise investment and risk management technology, making ETFs mainstream and integrating sustainability across our platform and operations. We also recognize our responsibility to our clients and the communities we serve. We're helping millions of people invest to build savings that serve them throughout their lives. We're making investing easier and more affordable.
We're advancing sustainable investing. And we're contributing to a more inclusive and resilient economy that benefits more people. To meet the needs of our clients over the long term, we're continuing to evolve, invest and innovate. BlackRock is challenging ourselves and the industry by asking big questions, like how can we contribute to an effective transition to a net zero economy? How can we bring the voices of individual shareholders to the companies they invest in?
How can we help more people benefit from the long term growth of capital markets? BlackRock is investing for the future, so we can better serve our clients, inspire our and support our communities. This is how we remain true to our purpose of helping more and more people experience financial well-being. And this is what will deliver long term value for you, our shareholders. Welcome to BlackRock's 2021 Investor Day.
Good morning, everyone, and thank you for joining us today. I'm Sam Tortora, and I lead Investor Relations at BlackRock. When I joined this team more than a decade ago, BlackRock managed roughly $3,500,000,000,000 of client assets. And the question we were asked most often then was, is BlackRock too big to grow? Our results demonstrate that we weren't then and we aren't now.
In fact, our strongest quarter ever for organic asset and revenue growth was the Q1 of this year as an asset manager investing more than $9,000,000,000,000 in AUM on behalf of our clients. At our inaugural Investor Day in June 2013, we laid out a simple framework for delivering value to shareholders comprised of generating differentiated organic growth, delivering operating leverage and effectively allocating capital to investments, dividends and share repurchases. Our execution of this framework is what will continue to generate value for all of BlackRock stakeholders in the years ahead. Before we begin, I'd like to remind everyone that today's videos were prerecorded over the last few weeks. And throughout the following sessions, we may make a number of forward looking statements.
We call your attention to the fact that BlackRock's actual results may differ from these statements. BlackRock has filed reports with the SEC, which list some of the factors that may cause the results of BlackRock to differ materially from what we say today. We've also provided a list of some of these factors in today's materials. BlackRock assumes no duty and does not undertake to update any forward looking statements. Over the next few hours, you will hear directly from leaders across BlackRock on how we're positioned to drive differentiated value to our shareholders in the years ahead.
We'll dive into 3 of our strategic growth engines, including ETFs and Index, illiquid alternatives and Aladdin, our technology platform. We'll show you the power of BlackRock's multi asset platform, like how we're embracing our scale to generate durable alpha and serving clients with whole portfolio solutions. Finally, we'll shed light on our focus and what's to come in areas like China, retirement and sustainable investing. We're scheduled to take a 15 minute break close to 10 a. M.
Eastern Time and we'll host a live Q and A session immediately after our presentations conclude at approximately 11:15 a. M. To answer your questions. You may submit a question for us at any time using the box on your screen or by emailing invrelblackrock.com. I hope you come away from today's session with a deeper understanding of how BlackRock is well positioned to continue delivering differentiated organic growth, how our scale and the connected power of our platform are virtues that enable us to be better for our clients and more efficient for our shareholders and how and where we're investing for the future, so we can evolve ahead of our clients' needs.
Most importantly, we believe in the long term growth of capital markets, and we see tremendous opportunity ahead for BlackRock to help more and more people experience financial well-being. Thank you again for joining us today. It's now my pleasure to introduce Rob Capito, BlackRock's President and Co Founder, to get us started.
Thank you, Sam, and thank you all for joining BlackRock's 2021 Investor Day and for your continued interest and support. Throughout BlackRock's history, we have always been guided by thinking through how to best serve our clients. We strive to put ourselves in the shoes of our diverse client base, clients with different backgrounds, different time horizons, different levels of assets and goals. We ask ourselves where is the next opportunity for clients and how do we lead the charge to deliver it for them. It is our steadfast focus on clients that has enabled us to also deliver long term value for shareholders.
From our IPO in 1999 through the end of May this year, BlackRock has delivered a total return of more than 9,000 percent. This represents a 23% compound annual growth rate, which is well in excess of broader markets and peers. Over the last year, more clients than ever before turned to BlackRock to help them navigate uncertainty, access liquidity, invest opportunistically and plan for the future. BlackRock was well prepared with thought leadership, investment insights and risk management tools to help them. We have proven our ability to be a true partner through the most difficult times, and clients continue to expand both the depth and breadth of their relationships with BlackRock.
This is what drives our growth today and will in the future. As you listen to today's presentations, you should gain a deeper understanding of the opportunities in front of BlackRock and of the people who are leading us forward. We have proven that we are not afraid to change and evolve. And in our 33 year history, it has worked out well for our clients, our employees and our shareholders. We are not a collection of products or client verticals or technology tools.
We are dedicated to delivering the whole of BlackRock to our clients. And in doing so, they benefit from our diversification, scale, technology and ultimate ability to look through a whole portfolio lens. While over the last several years, there has been a lot of focus on our fast growing ETFs and index, but over the past few years, we have transformed the franchise and turned it into an important driver of organic growth. Our overall liquid active platform generated over $30,000,000,000 in alpha dollars for our clients and gathered $88,000,000,000 in net inflows in 2020, representing 5% organic growth compared to the industry average of 1%. And while we've seen substantial growth in our active franchise, our market share of the active management industry remains in the low single digits and has significant room to grow.
I have never been prouder of BlackRock's 16,500 employees. I've seen their commitment to our clients and each other in incredible ways throughout the pandemic. They are creative, innovative, diligent, resourceful and most importantly, empathetic. I hope today highlights both the importance of our people and the power of our platform. This is the foundation for BlackRock's ability to continue to generate organic growth, leverage the benefits of scale and invest for the future.
With that, I'll turn it over to Rob Goldstein and Mark Wiedemann for a discussion of our strategy.
Hello, everyone. We're incredibly excited to be here with you today virtually and we look forward to hopefully our next Investor Day being live. I'm Rob Goldstein, BlackRock's Chief Operating Officer, and I'm joined by Mark Weidman, our Head of International and Corporate Strategy. In the next 20 minutes, we're going to do a few things. We'll talk about what makes BlackRock unique, diving into some of the key pillars of what and how we deliver to in 4 clients that Rob alluded to in his opening remarks.
We'll then walk you through our firm strategy, highlighting some of the key trends that are shaping our overall direction of travel. And we'll talk about why we are doubling down on the strategy as the world begins its long path back to normalcy post COVID. We'll then talk about the opportunities set ahead and why we are incredibly excited to continue investing for the future and evolving the firm in support of our clients. In many regards, with all that BlackRock has achieved in its 33 year history, as we look forward, we see our opportunity is just beginning. At BlackRock, we recognize that everything we do is in the service of our clients.
The investment products, solutions and technology we provide, they're tools, they're building blocks for clients to create a whole portfolio designed to meet some outcome. Our compass for the firm's strategy is what we believe clients need today and anticipating what we think they'll need in the future. That is what built BlackRock. But delivering that strategy, that vision of helping clients, whether they're individual investors, holding shares in our ETFs and mutual funds or large institutions, entrusting us with significant mandates, helping them with their whole portfolio across whatever investment strategy, alpha seeking, index, public markets, private markets across the whole world, across fund structures in an integrated way, including providing that same technology foundation, Aladdin, to clients that BlackRock uses itself to run its business, it's hard. And it can only work if we operate as one company, one BlackRock and deliver the firm to clients in a combined and singular way, not like a collection of different companies.
And what we found is if you could do that at scale with operating excellence, clients will want to entrust you with more and more of their portfolio over time. And one of the most exciting things we'll share a part of this presentation is that even though clients entrust us today with $9,000,000,000,000 in their assets, We believe that is actually a small part of the aggregate market, a market where clients more and more are looking to consolidate providers to simplify and to enable more efficiency in how they build their whole portfolio. When we think about this concept of the whole portfolio, we think of it like a puzzle that our clients are assembling. And like a puzzle, assembling it can be very complicated. And our job is to make it as easy as possible, whether through providing individual puzzle pieces, ETFs, active equity, cash, Aladdin, or through providing more whole portfolio solutions like OCIO or models, or through providing puzzle glue and instructions like Aladdin.
The nature of this puzzle is continually evolving and we're continually making new pieces and figuring out new designs. With that, I'll pass it over to Mark to walk through some of the trends that are shaping what pieces of the puzzle our clients are asking us to build.
Thanks, Rob. And thank you to all our shareholders and analysts for taking this time with us. I'm going to make 4 points about our strategy and our growth potential. First, our strategy springs simply from where our clients are going, a set of client needs that are reshaping our industry globally, the shift to the whole portfolio, sustainable investing, the thirst for private markets will figure prominently. 2nd, our strategy itself, keep Alpha at the heart of BlackRock, grow 3 engines, iShares Aladdin Private Markets, be the leader in sustainable investing and pull it all together as the whole portfolio advisor.
3rd, we have a very long way to grow. We may be the leader, but we have only a 3% market share in Global Asset Management that is extremely low versus our potential and also comparable industries. And last, our strategy is not just driving organic growth, but deeper relationships with our clients. Our clients' trust in BlackRock and hence our market share is growing in nearly every business. So where are our clients headed?
When we look across our clients, the individual investor in Texas, the Mexican pension, the French wealth manager, the Japanese insurer, the British asset manager who uses Aladdin and iShares, we see these forces reshaping their portfolios and our industry. That first set here on the chart lays out how our clients' needs are redefining our industry. From products to whole portfolios, this is the anchor concept. Clients everywhere in every client segment are spending less time on buying individual products and more time working on their overall portfolio. We've all known forever that the portfolio, the fundamental asset allocation decision is far and away the most important decision.
Model portfolios and OCIO are just expressions of this trend. Our industry, the work our clients and we are doing every day is just catching up with this knowledge. If the whole portfolio is where the action is, then power is shifting to those closest to the client and can help assemble the whole portfolio. That closeness can be a human relationship, a technology connection, a brand. And if whole portfolios matter more than individual products, then value for money becomes even more powerful.
Price competition and price consciousness are just much more important than they were before. As Rob says, it used to be that clients asked what's the performance, now tell me the price. Now clients everywhere often start by asking what's the price? For our asset management clients, this price pressure expresses itself as an intense need for operating efficiency. And 4th among these client needs is data and analytics.
Specifically, if the portfolio is what matters most, then the data and analytics to understand the portfolio and its risks become paramount. Put these four forces together and you have a shift in the industry. Clients want to work with a smaller number of players, of vendors, sometimes even just one. And while there is price pressure, the evidence is that the best firms can meet these trends and grow share and revenues. These four forces are reworking where value is shifting in our industry.
The next 2 are transforming the whole world of investments. Sustainable investing is the number 1 or number 2 topic on every client's mind. Sustainability risk is investment risk and opportunity. The clearest example is climate risk, where seismic forces will reallocate 1,000,000,000,000 of dollars of capital as the world shifts toward a net zero economy. But it's also social concerns, which tend to be particularistic and sometimes actually quite personal individual.
We see this as the biggest shift in global investing since the rise of securitization and indexing in the 1980s. We surveyed our clients to gauge how much money did they plan to put in motion. What they told us across $25,000,000,000,000 in assets and across every region of the world is that they plan to double their allocations over the next 5 years. With SFDR coming into force in the EU and coming rules from the SEC on climate and maybe human capital disclosures, this sustainability growth is still in early innings. The other number 1 or number 2 topic is the search for yield in a world awash with cash.
In a low or even 0 or negative rate world, clients of every type are seeking yield from private markets and infrastructure and credit markets, which we expect to double in size, in private equity and in real estate. And clients are going global to find positive real yields, buying Chinese bonds for instance, or for Brazilian domestic investors for the very first time, they're facing 0 rates and they're pushing portfolio flows to the world via iShares. And last are 2 sets of new opportunities you'll hear about today. The first is China. China is opening its capital account and liberalizing access to its domestic capital markets.
In 10 years, global investors will make the 2nd largest market in the world, even today, a much larger conscious part of their bond and equity allocations, up from low single digits today. And China is opening its domestic asset management industry as well. Like many other countries, but perhaps more dramatically, China faces a huge retirement challenge. The solution, the only solution is building an industry and a habit of deep professional private investment portfolios. And second is the retirement gap globally, the China problem writ large and exacerbated by the pandemic and persistent low rates.
Now retirement is hardly new for BlackRock. At least half of our assets are tied tightly to retirement goals. But we think there is giant opportunity ahead to help individual savers find greater certainty and security to retire in dignity. There's one last force worth our noting, an operating reality that we embrace and that's the growing societal expectations on the global firm and on BlackRock. BlackRock, this is less about clients with whom we have never had such close ties, but broader society.
We, as a global firm, need to earn our license to operate in every market, from France to Japan, to the United States to China. And we need to earn that license not just in the eyes of financial regulators, but in the eyes of a much broader society. Explaining who we are as a global asset manager and how we contribute in societies around the world and making ourselves felt as local close partners in all these markets is now an operating imperative. So this is BlackRock strategy. Our agenda today maps to this strategy.
Alpha at the heart of BlackRock, supporting the whole portfolio, providing value for money, because clients will pay if we perform in generating yield. 3 growth engines, iShares, the quintessential building block for the whole portfolio, the expression of value for money and the leader in sustainable investing. Aladdin, which gives the institution or the financial advisor the capacity to understand, to absorb internal and external data, to analyze and manage the whole portfolio and to help the organization operate with efficiency and stability. Aladdin helps us stay close to the client. It means we are not just another asset manager.
Private markets, as we strive to make alternatives less alternative for our clients as part of their whole portfolio and to help quench that thirst for yield. Be the global leader in sustainable investing. Over the course of 2020, we affected the biggest organic pivot in the firm's history, putting sustainable investing at the center of the firm. We've had a great start with our clients with a decade of work ahead of us. China, it's a star because we're building a mini BlackRock from scratch, pulling all of these elements together.
We aspire to be the leading global manager of Chinese assets, providing clients everywhere with access to the Chinese capital markets, while also contributing locally to helping build the country's capital markets and retirement system. And we pull it all together and lead as the whole portfolio advisor. The whole portfolio wraps up everything else in our strategy. It's a spirit, not a product. It's a way of working with a client on her most important problem, how do I build my portfolio.
So where can our strategy take us toward much closer relationships with clients? If you look at the whole asset management industry, we are only 3% of the revenues of the industry. If you take the top 5 asset managers together, it's only 11%. Now just compare that with the sales and trading businesses of the banks, where the leading player is 13% or 32% for cloud computing. Client portfolios are still radically fragmented and more with fewer has a very long way to go.
It's pretty simple. If we listen to our clients and deliver a little bit better than the rest, our clients will trust us with more of their portfolios. This simple concept has driven us to grow at 7% versus the industry at 3%. In 2020, our private markets business grew at twice the rate of the industry. Our tech revenue growth exceeded the industry as well.
Our active franchise grew despite industry shrinkage. And then ETFs where we are far and away the global leader, we're keeping pace with a market that is still small relative to its future. And in the very narrow definition of whole portfolios as a product, we gain share here too. Our share is growing because our clients' trust in BlackRock is growing. Now Rob is going to talk about how we pull it together at BlackRock to deliver for each and every client as one firm, one BlackRock with operational excellence.
Rob? Thank you, Mark. Now that we've talked a bit about what we are doing to serve our clients and the results that we've seen from that approach, I want to discuss a bit about how we are delivering for clients. For those of you that have heard me speak before, it likely will not come as a surprise that we view our ability to operate at scale as an information processing, a technology exercise. And that technology starts with Aladdin.
Aladdin is a key enabler of why clients have entrusted us with more of their portfolios. This tech centric mindset has differentiated BlackRock since its founding. And as clients expect more technology and technical connectivity from their investment managers, this will only further differentiate us. But in addition to technology, we believe our culture, articulated by the BlackRock principles is a key input into how we've built BlackRock. So what does scale mean in practice?
It means controlled growth, greater efficiency, and importantly, the ability to deliver and improve on operating excellence, regardless of size. COVID and the challenges it presented really to every company over the past 15 months has been an incredible testament to BlackRock's scale and scale benefits that we're able to provide to clients. Record volumes of trades, extreme volatility and an overall requirement to communicate continually with clients, either through our BlackRock Investment Institute platform for market insights or clients using our technology and tools to perform their own portfolio analysis and stress testing. And lastly, I had shared this slide at our last Investor Day in 2018, and I thought it would be helpful to provide an update. We've been able to continue to grow our assets under management and our technology services revenue, which have fueled our increased ability to invest in technology, which ultimately leads to even more efficiency in our operating platform.
And while technology is an incredibly important input into how we deliver for clients, BlackRock simply would not be able to function without our culture, our principles. They serve as our North Star in every decision that we make. We originally introduced the BlackRock principles in 2012. We use them as inputs into how we hire, how we judge our performance and how we promote our employees. They are literally written on the walls in our offices and they're meant to serve as reference points whenever we are faced with tough decisions, either individually or collectively.
That said, BlackRock and the world in which we operate has changed dramatically since these principles were first introduced. So last year, I along with many of my partners throughout the firm kicked off a project to take a fresh look at our principles to make sure they still represented the BlackRock of 2020 as well as they represented the BlackRock of 2000's workshops, 1st in person, then virtually as COVID made the in office dinner strategy somewhat extinct, we landed on 5 enriched BlackRock principles that serve as the answer to the question, how does BlackRock operate? First, our fiduciary duty to clients remains our number one goal and ambition. Our clients' interests come first and delivering for them is what inspires us to come to work every day. We fulfill this fiduciary obligation as 1 BlackRock.
We are committed to delivering for our clients and winning as a firm together. And we believe that building an inclusive, diverse and equitable BlackRock is integral to us being able to achieve our ambitions. We are passionate about performance. We're not shy in evolving our firm in the constant pursuit of delivering performance for clients. We take emotional ownership in everything that we do.
Our culture is defined by the sense of responsibility and accountability for our clients and for each other. And we hold ourselves and one another to the highest standards of excellence. And finally, we are committed to a better future. You're going to hear a lot more about this today when we speak about our efforts to build more inclusive, resilient retirement solutions and discuss how we're incorporating sustainability throughout the entire firm. But we wanted to be incredibly clear that we are long term thinkers and planners and want to build a better financial future for our clients and all of our stakeholders.
So that was a bit more about the what we're delivering our clients and how we operate BlackRock at scale guided by our principles. We're excited to spend the rest of the day doing deeper dives to bring these efforts to life.
Hi, my name is Saleem Ramji and I run BlackRock's ETF and index investing business. Now this July marks the 50th anniversary of the first index product. It was introduced in 1971 and coined as an investment technology by a team at Wells Fargo that became VGI that eventually became part of BlackRock. Now from that first $6,000,000 mandate, our clients assets in ETF and index investing at BlackRock today are a 1000000 times larger. And it's the dynamism of ETFs and index investing as an investment technology and its ability to unlock new areas of growth that makes us believe even at our size that we have decades of growth ahead of us.
First, a little bit of context. ETF and index investing is a $6,000,000,000,000 business at BlackRock, but it's really 3 distinct areas of business. About half of our clients' index assets aren't in ETFs at all. The largest portion is an institutional separate accounts. It's a data and technology intensive business where scale and complexity and precision really matter.
This has historically been a slower growth and more stayed business, but it's undergoing a major shift towards ESG, which is why we're investing in ESG Research and Technology and Custom Index capabilities. A smaller portion, but still a few $100,000,000,000 is in our index mutual funds and sub advisory assets, which have been growing at double digits led particularly by wealth outsourcing in Europe. But it's the other half of our business, the $2,800,000,000,000 in ETF that I wanted to spend the bulk of our time. ETFs represent over 3 quarters of our overall revenues and over 90% of our organic base fee growth. Over the last 12 months, we've seen over $500,000,000 in organic base fee growth from ETFs at about 14% per year.
Since our last Investor Day, 3 years ago, we've seen nearly $1,000,000,000 of organic base fee growth, which is almost as much as our next 3 ETF issuers combined over the same period. All parts of our business are important to us. The total ETF and indexing platform for its scale, its technology and its ability to manage complexity and the ETFs for their organic base fee growth. But given the centrality of ETFs to our revenue growth story, I'm going to spend the bulk of our time together there. And specifically, why we think ETF penetration is still very low and the generational shifts that we can unlock through new growth.
2nd is why we believe our ETF business is different and has delivered differentiated revenue growth. And third, why we are investing in our scale and our ability to handle complexity on our entire platform and connect it to the rest of the ETF and indexing ecosystem. Let me first start with a lens of the industry on ETFs. As I said, penetration rates are still in the single digits. We are in the midst of 3 generational shifts that are unlocking all sorts of new growth opportunities.
And we expect that by 2025 ETFs will be $15,000,000,000,000 So even at $8,000,000,000,000 in total industry assets today, globally, ETF penetration is still low by market, by region, by client and with a lot of room to grow. Just to give you a couple of examples, ETFs are only 3% of the total market of stocks and bonds. Even our most established client segment, fee based wealth globally, ETF penetration is only 11% of clients overall portfolios. Now, in citing these low penetration rates, I'm not just taking a large number and dividing it by an even larger number, but I'm trying to make a point about the markets in which our ETFs now compete. Our ETFs are becoming the essential ingredients to whole portfolios and are often substitutes for single securities, not just active management or traditional index or ETF providers, a theme that you're going to hear from me, from Martin and from Steven.
Our ETFs are becoming an investment vehicle of choice for a whole range of investment capabilities, ESG, factors, thematics, even active well beyond the traditional market cap indices. Our ETFs are competing in the capital markets with stocks and bonds, most notably in the modernization of the bond market itself. But low penetration rates are not what's fueling my optimism. That's just telling us that we have a lot of room to grow. My optimism is rooted in the innovation that's happening now.
Now every Investor Day, we talk about an inflection point for ETFs and index, and today will not disappoint. But there are 3 shifts happening simultaneously from what we view as the 3rd, 4th and 5th generations of ETF growth. The 1st and second generation began a long time ago. 1 gs was the 1st index fund 50 years ago. 2 gs was the 1st ETF launched 30 years ago as a way to make indexing more convenient and more widely accessible.
Since then, ETFs and index have been used synonymously and more often versus active. This narrative is now dated. What's more important to our growth are the 3 generational shifts that are happening now. The most important shift 3 gs began 10 years ago with BlackRock buying BGI. It is important because it shifted the focus to our clients' whole portfolio and viewed ETFs and active as complements to build a better portfolio.
The 4th generation probably began about 3 or 4 years ago and it's really an era of innovation and using the ETF beyond traditional market cap weighted indices. For example, since our last Investor Day 3 years ago, we've launched over 170 unique new ETFs, mostly in new places like bonds or ESG or thematics or active management. They've generated nearly $80,000,000,000 in flows or said differently, nearly 20% of our revenue growth has come from products that didn't exist 3 years ago and in categories that we're helping to create. We've also more than doubled to $300,000,000,000 assets in ETF that seek to outperform traditional market cap indices through ESG indices, factors, thematics or even active management. This innovation has opened up wider markets for ETFs to wrap and we believe it will position ETFs as a default investment vehicle in the future.
The 5th generation where ETFs are becoming a more central part of the capital markets themselves, that's been around for a few years, but it really took off in a major way in 2020 when ETFs, especially bond ETFs proves themselves under extreme stress conditions. Now, any one of these three shifts would be a major inflection point. And it's why we see our addressable market, not just as the ETF market or even the index market or even whole portfolios, but stocks and bonds as a whole. What all of this means for the medium term is that we expect client assets and ETFs to nearly double in size to $15,000,000,000,000 by 2025. And even with $15,000,000,000,000 in assets by 2025, ETF penetration would still be in the low single digits, which is why we see room for growth potential ahead.
Now, so much for the industry lens. Now, what I'll talk about is us and how we are executing against this potential here and now. So BlackRock's ETF business is different and it positions us to deliver strong revenue growth and long term leadership. First, we have over 1100 ETFs that wrap multiple kinds of investments. We have over 30,000,000 clients globally that use our ETFs.
And we have a platform that handles complexity with precision and scale. But what also makes us different is that our ETF business does not stand in isolation. You will hear about ETFs not just from me, but in virtually every presentation today, which speaks to how integrated they've now become with the whole firm. Let me spend a moment on the first point of differentiation, our product breadth and how this has resulted in differentiated growth. We have been delivering double digit asset and mid single digit organic base fee growth.
But the important thing though is to understand why. We started to disclose our ETF product segments in greater detail this past quarter to provide greater visibility into our results themselves. Our core, which is about a third of the assets, but only a tenth of the revenues is at the foundation for building better portfolios and our scale enables us to be price competitive and grow revenues, not just assets. Our strategic segment is again about a third of our assets, but it's 40% of our revenues and 90% of our revenue growth over the past 3 years. It includes segments like bonds, factors, ESG and thematics.
They're competitively priced and command premium fees relative to the core because they are much more affordable when you look at their substitutes like trading bonds or active management or even less liquid ETFs. Our Precision segment, which is also a third of our assets, but about half of our revenues is focused on targeted slices of the market offering granular exposures typically for institutional buyers. Precision has generally experienced greater inflows in risk on environments like the past 12 months than in risk off environments like in 2019. Let me give you a couple of examples now of how we are executing against this differentiated product proposition. First is managed models, and you'll hear from Martin about why we think this $4,000,000,000,000 category in the United States will more than double over the coming years.
This growth in whole portfolios is at the heart of the 3rd generation of growth that I talked about and it's really important for ETFs. Managed models are a third of our ETF flows today and we expect this to be more than half of our flows by 2025. Now BlackRock's own managed models are an important contributor to ETF growth, but 3 times more important are models that wealth managers or other asset managers are building and customizing with our ETFs as building blocks. And if you add in customization through technologies like Aladdin or our Advisor Center, we're enabling the shift to models, which is in turn driving the growth of ETFs and particularly our ETFs. Sustainability is another example of why product breadth matters and how innovation and what ETFs can do is expanding the market for sustainable investing.
Last Investor Day, we had about $10,000,000,000 in sustainable ETFs and index funds. Today, we have approximately $130,000,000,000 And as you'll hear from Paul, we expect significant growth in the years ahead. We were able to capture this growth because we were able to innovate at scale, about half of those 170 new ETFs I talked about were in sustainable. We anticipated that clients wanted customized choice in screened broad thematic and impact ETFs and how they might fit in a whole portfolio rather than a singular way. And we were able to wrap proprietary insights into ETFs like the active low carbon transition readiness ETF that Rob had mentioned earlier.
More importantly, it was an example of how we were able to mobilize the whole firm and do a lot more than we could do in isolation. Now, let's shift from products to clients and the diversity of our 30,000,000 clients. All around the world, commissions and other barriers to ETFs are coming down. And as this happens, more people are adopting ETFs and especially ours. And let me just give you a couple of examples.
On U. S. RIA platforms back in 2019, commission barriers came down. Since then, our flows have increased by 60% and we've maintained strong ETF market share. In Germany, over 2,000,000 Germans now contribute every month to ETF savings plans, where iShares is the market leader.
That's 3 times more than the number 3 years ago. And so beyond the external barriers to adoption like commission, we've also made certain ETFs more affordable and in doing so we've gained more client adoption and we've increased our overall revenues. Now we've long maintained a disciplined pricing framework focused on high growth categories where clients like long term buy and hold clients are especially sensitive to expense ratios. We invest about 2% of our revenues annually in price changes to drive overall growth. And just to illustrate from our investments over the past 5 years, we've reinvested about $400,000,000 between 2015 2020 and the net run rate revenue impact has been positive $240,000,000 more than recouping the investments that we made over the past 5 years.
Now, the last illustration I wanted to give is what's happening in the convergence between ETFs and the capital markets and especially in the bond market. I'm not going to dwell about the growth we've been achieving in bond ETFs. We have grown that by over 50% in the past 3 years, because we've spoken a lot publicly about our growth ambitions in this arena. But the most important thing is that bond ETFs are becoming a modernizing force in the $100,000,000,000,000 bond market itself. Regulators and policymakers have written about their work as shock absorbers in times of stress like in 2020.
Asset managers and asset owners have embraced them as a more efficient way to access the bond market for liquidity, transparency and lower transaction cost. They become central to growth in electronic trading in the bond market and in portfolio trades. Just to give you one indicator of how far we've come, 80% of the largest active managers now use bond ETFs as part of their investment process. This turns all the dated narratives of active versus index or even the current narrative of active and index on their heads. ETFs are becoming an essential technology for active management itself.
Now, we've talked mostly about ETFs given their importance to revenue growth, but I wanted to end on our ETF and index investing platform as a differentiator. Our platform, which of course runs off Aladdin, enables us to manage significant assets, but also significant complexity. We run over 1,000 benchmarks and we do it with market quality, with precision tracking and with ecosystem integration. To give you an example of why market quality and precision matters, let's look back to last year and one of the most extreme market stress tests that we've ever experienced. On each of the 5 dimensions in which we view quality, usage, tracking, primary efficiency, trading cost and price discovery, our ETFs were resilient and performed well.
Importantly, our clients saw that all index and ETFs aren't equal and quality dimensions really matter for price discovery, for liquidity, for tracking and for multiple other purposes. The important thing about the technology is that it is reliable And in stress conditions, our platform and our 1 BlackRock culture ensured that clients were able to rely on us and we were able to keep our commitments. A final differentiator of our platform is that we are looking beyond our walls and investing in integration to the broader ETF and index ecosystem. I'll give you examples of the activities that we're executing against, 1st, to continue to lead in market quality and second, to enhance our scale efficiencies. 1st, on market quality.
We already have a large market maker and authorized participant community. We have connectivity to multiple trading venues and we're working to have ETFs embedded in Aladdin and all third party workflow technologies. These are meaningful investments and partnerships that we are making to differentiate. We are also continuing to invest in scale efficiencies. We get this obviously through Aladdin, but we're also diversifying our ETF servicers, diversifying index providers and expanding our own capabilities around self indexing, custom indexing and proprietary data and analytics, especially in fast growing areas like ESG.
So in conclusion, I'd just like to end with 3 thoughts. First, we expect that there will be significant growth in the ETF industry, nearly doubling to $15,000,000,000,000 by 2025 and it's going to be led by a series of shifts in the uses of ETFs in whole portfolios, in wrapping investments beyond traditional indices and in the modernization of the bond market itself. 2nd, we believe that BlackRock's ETF business is different and it positions us well to deliver strong organic base fee growth and lead the industry through these shifts, especially with our product breadth, our global client reach, our scale and connected platform and our ability to mobilize 1 BlackRock. And third, we are committed to investing in new ways for clients to use our ETFs, further innovations in our product lines and further investment in the scale, the quality and the customization and connectivity in our platform in the expectation of decades of growth ahead. And so with that, let me pass it over to Edwin.
Hi. I'm Edwin Conway, and I'm the Head of BlackRock Alternative Investors or as we like to call them, BAI. I'm very excited to spend the next 15 minutes with you. Really to describe the current state of our business, but also our future growth ambitions. Also really proud of what we've engineered over the past 30 years.
But in that time, we've seen tremendous acceleration, particularly in the past 3 to 5 years alone. So how does BlackRock Alternative Investors look today? We're at $297,000,000,000 enterprise and actually $28,000,000,000 of that today is in dry powder really from our liquid product capabilities. That makes us a top 5 global alternatives manager and we're active in all the relevant asset classes across liquid and illiquid. And if you take the illiquid side of our business, it's private equity, it's real estate, equity and debt, credit and infrastructure equity and debt.
And when we get to the liquid side of our business, which approximates about $76,000,000,000 is the hedge fund platform, both comprising solutions and direct strategies. Now from a human capital standpoint and location, we are 1100 professionals strong, located in 50 cities throughout the world. And this is really supported by a broader BlackRock that gives us tremendous muscle. Now this scale and reach is critically important in today's world, not just because of COVID, but because of the extreme competition we have for these assets. So how has growth been?
Growth has been strong and really accelerating. And let me spend a few moments on the numbers. A 13% CAGR over the past 5 years within BAI and the last 12 months alone have been really impressive. We've raised 47,000,000,000 which equates to 24 percent of organic growth rate. It means there's RMB299 1,000,000 in net new base fees that's attributable to that raise, which is a 25% organic base fee growth rate as well.
Now when you look at 2020 alone and you combine the performance fees that we generate from these funds inclusive of base fees, we've generated $2,400,000,000 That's a 49% year over year growth. And when you look at the $28,000,000,000 I mentioned a moment ago, that's dry powder. And as you know, that is to be invested over time. That will lead to an additional $190,000,000 in future base fees. And as we continue to pivot towards private markets, where carry is so important, you'll see that as of the end of Q1, our carry stands at a $748,000,000 number.
This is really growing quickly as we accelerate into the space. And quite frankly, over the next 5 years, you would expect to see that as a multiple of this current number. So do we see double digit growth persisting? The answer is yes. We very much believe so.
And here are the reasons why. Our market share currently stands at only 2%. We're far from crowded out of this opportunity set. Our strong investment performance is really a critical ingredient as clients are foregoing opportunities in other parts of their asset allocation in pursuit of alpha. And we see this as strong in our case, which is really leading to an acceleration of re up in our funds, particularly in future vintages.
Client demand is also accelerating. If you look at the institutional community alone, 80% plus of them are telling us they're increasing their alternatives allocations, but particularly to private markets. So what is today an $11,000,000,000,000 industry by 2023 will equate to $14,000,000,000,000 and we believe based on industry research, dollars 17,000,000,000,000 plus will be there by 2025. Now a very interesting trend is happening throughout this period of time. Clients are actively consolidating their managers.
They're choosing to do more with far fewer. This is really a distinct advantage for a multi oles manager such as BlackRock. Now the reason they're doing this, it's very hard to put these building blocks together, the timeliness of the information, the transparency, etcetera, and hence they're looking for true partnership. So all that said, if we just focus on private markets within BAI, which is the fastest growing area within alternatives, over the past 5 years alone, we've raised $100,000,000,000 However, we'd expect to raise the same amount, if not more, dollars 100,000,000,000 plus in only the next 3 years, much more truncated period of time, but I think that speaks the range of what we do and also the ambition and the appetite of our clients. So when we look back 5 years, back to 2016, we had 2 funds larger than $1,000,000,000 Today, we have 14 funds larger than $1,000,000,000 And in BAI, we're typically in the market with approximately 20 private market funds per year versus what the industry tells us that our peers are really in market with anywhere from 4 to 10 at most.
So really double of what is an industry standard. We think that's really important because now we've been able to harmonize our capacity to be in market with many things, but the reason being we can help our clients throughout all of their approach no matter where they are in fulfilling their allocation ambitions. But clients are truly rewarding this partnership approach. As mentioned, manager consolidation is probably one of the most pronounced trends we're seeing. Therefore, and you can see it from our slides, our range has become a distinct advantage, equity and debt.
And that ranges from all types of risk classes. Our focus on solutions is really a distinct advantage. It's no longer good enough to just sell funds. Openness and transparency, not secrecy, which the industry has been known for in the past, is a critical ingredient too. And let's not forget, this is about matching publics and privates together.
It's not one versus the other. So a whole portfolio approach is demanded by our clients today. Not only for that, the empathy for the uniqueness of each client circumstance. Not every 2 clients is the same. Liabilities are different, funding gaps are different, risk tolerances, liquidity needs and so on.
But by having Efront and Aladdin to wrap all of this information for us to distill what's in the best interest of our clients to work with them in a solutions orientated way, we think is the future. So this true partnership approach is exactly what clients are looking for today, particularly the institutional client base. We intend to lead the industry. Now given the record growth in assets and competition for unique deals, remember, there are about 35,000 plus alternative asset managers in the world today. We believe the new source of differentiated Alpha is going to be access to high quality but yet proprietary opportunities.
So sourcing and underwriting have never been more important. With our proprietary sourcing within each investment team, which means in the range of activities I mentioned earlier from private equity to real estate to credit, where we have direct participation in markets across those 50 locations around the world. And you couple that with BlackRock Capital Markets, BCM, that's really focused on sourcing and financing globally. We're at a point where even last year, we were able to originate over 5,700 unique deals. Now we're at a point where we're seeing 25 actionable deals a day, which is a tremendous amount of throughput, yet only 4% approximately make their way into our portfolios.
Why? Well, we have an extremely high bar, a high bar because our clients really need these assets to work hard for them. So our goal is to source unique deals, idiosyncratic deals, deals our clients are not seeing from other managers and hence delivering real partnership, but this takes a true global network of relationships, a global footprint, strong human talent, but again, it all needs to be wrapped with data, analytics and technology. And why? Because this allows us to make more informed and more prudent investment decisions with a fulsome set of tools.
Now whilst we believe we're going to experience growth from all parts of our alternatives platform, both liquid and liquid. Without exception, that's been the case for the past number of years. We think that will persist. However, we do believe pronounced growth, meaning our growth drivers, will particularly come in the next 3 to 5 years from credit and from infrastructure. Why?
Well, it's the most underdeveloped and under invested part within our clients' portfolios, both credit and infrastructure. Not just that, but they have very attractive risk and return characteristics. And importantly, they are yield and income enhancing, which is in very high demand as we all know today. Now as for our growth accelerators, they fall into 3 areas: our expansion into wealth, advancing in APAC and last but not least, sustainability. So let me start with our growth drivers.
Firstly, credit. The credit markets have seen dramatic expansion over the past number of years. We also know banks have largely retreated. Private enterprises are they they're not only staying private for longer, but in many cases, they're staying private forever. As such, you've seen asset managers become the new lenders of choice.
So why BlackRock? Well, our credit business is 30 years young at this stage. It really goes back to the heritage of the firm as we established our investment grade fixed income capability and this was born from that. It's allowed us now to scale into the 3rd largest credit manager in the world, yet we still only have 3% market share at 123,000,000,000. Dollars And our scale and breadth has truly allowed us to be creative, to be adaptive in our capital solutions.
So from high yield to CLOs to middle market lending to special situations and opportunistic, we have a full range of capabilities across the board. And this is all supported by deep fundamental research and teams that really have experience in workouts, which is critically important to this complex asset class. And we envision growth in 3 parts of our credit franchise, leveraged finance, but particularly multi strategy credit because there we're combining public credit with private credit, very much in demand today. And we're also seeing huge demand obviously for private credit. So on to our infrastructure franchise, one of our other growth drivers.
We're equally enthused about our accomplishments, but importantly about the future. If we think back to 2016, we were a $9,000,000,000 enterprise in infrastructure. In Q1 2021, we've now eclipsed $34,000,000,000 That makes us the 7th largest from an industry ranking perspective, infrastructure manager. Yet we only have a 4% market share. Now infrastructure is one of the few asset classes where not just government and policymakers agree, it's really important engine for fiscal stimulus and allows some of these economies to really rebuild.
And by the way, it's so much more than roads, bridges and airports. We have largely focused on this huge energy transition that's well underway around how fossil fuels to sustainable forms of energy is taking more prevalence. There is a multi $1,000,000,000,000 shortfall to fund all these necessary projects and private capital in our mind in our clients' minds will be a critical part and this is where we have established ourselves, I believe, as a leader in the space. And most notably and recently, you've seen the closure of our Global Renewable Power Fund III at €4,800,000,000 to give you a sense of where demand is going. Our Fund I was 8 times smaller than this particular fund.
Our Fund II was 3 times smaller than this particular fund and that will probably speak to the quantum of demand that's coming in the future. So total renewable platform today stands at €9,500,000,000 as of March. And the renewable strategy overall €11,000,000,000 So with these new vintages coming, with policy support, with real and very tangible growing client demand, this asset class holds huge potential for our alternatives business. I wouldn't be surprised to see our funds eclipse $10,000,000,000 in the future. So let's pivot quickly to our 3 growth accelerators.
1 is expanding into wealth. If you look at our business today, it's approximately 90% institutional, but that was very purposeful. We've been able to build our track records and build out our teams as well as work with very sophisticated large pools of capital on the institutional side. That's allowed us to innovate together. But today, it's really time for us to make alternatives far less alternative.
It's a global opportunity to work with wealth and the relationships we've largely established and the brand that we hold with private banks to wirehouses and independent RIAs is quite unmatched. And it's time to capitalize on that and bring all to the many and not the select few, not just the ultra high net worth individuals. When you take a step back and look at the industry, actually the ambition is high. Wealth will tell you today on a global basis that a 20% plus type allocation is the ambition, yet in fact it only stands at 3% today. So at 10% of our business today, our goal is for this to represent about 25% and maybe even plus in the coming years due to the growth of Global Wealth, but the prevalence of alternatives in the wealth client portfolios.
Advancing in APAC, number 2. We're already in China, Hong Kong, Japan, Singapore, Australia and so many more. There's tremendous growth happening in this region. And as we think about it from an investment standpoint, from a deal sourcing, we can really take advantage of this vibrant opportunity set from China to emerging Asia to infuse this into our portfolios to help clients garner that alpha. There is much access that we can provide to innovation within this region.
But from a client standpoint, very large and very sophisticated pools of client capital exist there. And they're looking for trusted access to this global alternative opportunity set. And they're looking for it with a broadband. So creating local products for local consumption and local products for global consumption is a critical part of our going forward strategy in APAC. And we're very excited about what the future will bring there.
And then last but not least, sustainability. Critical focus for our clients. It's integrated in all of our decision making processes. Each investment decision is reviewed with an E, S and G lens. We're providing complete transparency back to our clients with regard to those metrics and we've really seen our suite of capabilities dedicated to sustainable themes and those offerings across asset classes expand year over year.
Now our journey started with renewable power, albeit about 12 years ago. But now, as mentioned, it spans so much more. So as I said at the start of the session, our talent and the support of our broader BlackRock platform, it really brings us, I think, a true competitive advantage. And you're going to hear that directly from our investors.
My name is Pam Chan and I am the Chief Investment Officer and Global Head of BlackRock's Alternative Solutions Group. We invest across the private market space as the firm's multi asset investment team within Altz. Given my cross asset class remit, I have had the opportunity to witness firsthand the tremendous growth of the BAI platform, not only in asset base, but also in the heterogeneity of the asset classes, sectors and regions we cover. The breadth and depth of both the BAI and broader BlackRock platform have enabled my investment team to access differentiated and high quality deal flow. And with these inputs, deliver stronger portfolio performance and outcomes on behalf of our clients, whether those outcomes be purely financial, like inflation linkage, income generation or total return or include other themes like sustainability.
That being said, the value of the platform for me is not limited just to sourcing. The firm's focus on technology, data, risk and whole portfolio research has enabled my team to take a risk based top down view of our alternative portfolios using Aladdin, moving beyond only thinking about alts from a deal lens and really understanding how alts fit into the context of the whole portfolio through continued research and new tools also refine how we think about adjusting these portfolios as market conditions shift and client objectives evolve. To illustrate, earlier this year, we partnered with BlackRock's artificial intelligence lab as well as various teams within BlackRock Solutions and of course, the AI to publish a paper entitled A Better Way to Build Private Market Portfolios. In this paper, we outline a novel, quantitatively driven data science approach to private market portfolio construction. This is an example of the cutting edge work that can be achieved through harnessing the collective intelligence and capabilities of the platform.
Here, combining what we know about ALT's fundamentally bottom up, what we are affectionately calling the alternatives Turing test, along with innovative data science techniques and tools, enabling us to blend liquid and illiquid assets in the context of a cohesive framework and ultimately making alternatives less alternative. In short, the platform is key to my edge as an investor and to our growth going forward.
I'm Vina Isaac, and I'm one of the Managing Directors on the secondary and liquidity solutions platform, also called SLS. I joined BlackRock in early 2019 to help build and scale our secondaries program. So secondaries in a nutshell provides liquidity to holders of illiquid private equity and private markets and is critical to the liquidity within alternatives. And as a strategy, it's characterized by high velocity of deal flow. It's broad based in the sectors, the geographies and the asset types that it encompasses.
It's also very data intensive and very relationship oriented. And there are a couple of key things that make the BlackRock AI platform particularly compelling for a secondary strategy. Firstly, on the sourcing front, just given the breadth and the depth of BlackRock's relationships with general partners, with companies, with asset allocators and financial institutions, it allows our team to source extensively and globally. And currently, we invest in under a percent of the transactions that we source. And then from a diligence standpoint, secondary is highly data intensive and a single deal can include hundreds of companies.
And so our ability to partner with BlackRock's eFribe teams and the technology teams allow us to evaluate large amounts of information efficiently, which is key both to accurate underwriting and also our go forward monitoring and risk management. Finally, Techneres is broad based. It covers a wide range of sectors, geographies and the majority of private market asset classes. And so the breadth of the global investment expertise at BlackRock across the private and public assets allows us to evaluate really any type of transaction under any timeline. So for a strategy that is as fast moving, as data intensive and is relationship oriented secondaries, the BlackRock BAI platform offers tremendous leverage that is very distinct from our market peers.
We couldn't be more excited about our alternatives business and how we're making alternatives less alternative and much more accessible. We believe that double digit growth in both assets and revenue is here to stay. It's here for the foreseeable future across all of BAI businesses. And with strong performance and with true partnership, we believe our clients will do more with us as they continue to consolidate their manager positions. I want to thank you, and I'd now like to turn it over to Sudhir Nair, my partner, about the Aladdin Technology business.
Hi. My name is Sudhir Nair, and I'm the Global Head of the Aladdin Business at BlackRock. I'm really excited to talk to you about BlackRock's commitment to technology, how we think about the future and how we're positioning Aladdin for the next wave of growth. Let me start by setting the stage a little bit. 1st and foremost, BlackRock has always been a technology company.
We think about Investment Management as an information processing business, and our Aladdin technology powers the firm. We use Aladdin to manage all aspects of the investment process, from how we build portfolios to how we partner with our clients. Beyond this, it's a foundational part of our culture. It's embedded in everything that we do, and especially during the pandemic, it's been key to keeping our employees connected and collaborating with each other. During my 20 years at the firm, I've had the pleasure of helping to build our BlackRock Solutions business, delivering the benefits of Aladdin to hundreds of organizations around the world.
Our vision for Aladdin is to build a comprehensive operating system for asset management, allowing all of the people who work on managing portfolios to speak the same language and collaborate seamlessly across the investment life cycle. That said, our industry is going through an incredible time of transformational change. Every company is evolving and technology can no longer be one size fits all. So we continually adapt Aladdin to serve the needs of new types of users. Aladdin has grown far beyond its roots as a risk management technology and today represents a collection of integrated capabilities tailored to different market segments.
So while 75% of our new revenue comes from serving institutional investors, we continue to make progress expanding Aladdin into new segments such as Aladdin Wealth for wealth managers and Aladdin Provider for asset servicers. Today, across the globe, the Aladdin community consists of over 9.50 clients and roughly 82,000 users, all working together to keep Aladdin best in class. By focusing on clients, Aladdin continues to be a key growth engine for the firm. Since 2016, organic revenue growth each year has been in the lowtomidteens, and we expect this growth to continue through 2021 and beyond. Despite an unprecedented operating environment in 2020, we're proud to have delivered growth of 17% to reach $1,100,000,000 of recurring revenue.
In order to provide further insight about our performance to investors, this year in our Q1 earnings, we added a new financial performance metric, annual contract value or ACV, which is commonly used by technology companies to report financials because it's directly linked to net sales and provides a good indicator of growth momentum. As we look ahead, we remain confident in Aladdin's growth potential and our ability to add clients across new and existing segments, grow existing relationships through our innovations and product offerings and expand into underpenetrated geographies, most notably Europe and Asia. Our sales opportunity pipeline is as strong as it's ever been. And if anything, the pandemic has highlighted the urgency for our industry to modernize, to have access to streamlined, efficient technology with robust risk management. And we believe this is going to continue to serve as a tailwind for Aladdin in the years to come.
So hopefully, you can see we're excited and energized about the opportunity for Aladdin to help really reshape the industry. Our stated mission is to make Aladdin the language of all portfolios, which means that in everything that we do, we think about ways that we can help our clients, help them enable clarity at every point in the investment process, so they can make more informed investment decisions, help them drive scale and connectivity across our otherwise fragmented industry and help them by providing capabilities to build risk adjusted portfolios, so they can help more of their clients achieve better investment outcomes. By being part of BlackRock, we know firsthand what it takes for our clients to be successful. In fact, it's this user provider business model that truly differentiates Aladdin and enables us to deliver on our mission. Our philosophy starts with looking forward at market trends, listening to what our clients are saying and then building for the future.
Our 1 BlackRock culture allows us to leverage the best thinking and deep industry insights that come from various teams across the firm. It's this unique combination of strong technology built by an asset manager, coupled with the talented people who bring a practitioner's view towards workflow and design that's allowed Aladdin to continually innovate and evolve. When we implement Aladdin in a client, we're not just putting in a new system. We're helping them use the technology as a catalyst to drive a large scale business transformation. Probably the best way to bring this to life is by looking at an example.
We recently began working with a large global organization who wanted to transform, to accelerate its business by revamping its institutional and wealth management operations. Despite its ambition, they realized that their current technology and workflows weren't going to be able to support the new direction. They had multiple business units running independently on different systems with different processes. They had no central source of data, which made it really hard for their teams to work together in service of their clients. And they had a risk management function, which had been built to look at the organization in pieces, in silos rather than a wide view across the company.
Fast forward to today, we're having implemented Aladdin. They're now running on a new, highly scalable operating backbone, one that's powered by great quality data that spans every portfolio across every asset class, both public and private. Their teams are working across the organization, leveraging a new set of industry best practice workflows. And by simplifying and relying on Aladdin as their core, they're able to focus their technology resources on the real value added and differentiated activities that are going to allow them to truly compete. That's the Aladdin effect.
It enables new capabilities to drive top line business growth, while at the same time unlock scale and efficiency, creating a controlled operating environment that has a direct positive impact on the bottom line. This is just one example of the type of work that we do with clients. And as we look ahead, we believe that the future demand for tech enabled transformation is significant. We estimate the current addressable market for Aladdin's existing business is roughly $10,000,000,000 of which we've only captured 11%, leaving significant room for growth. In addition to focusing on our core market, we're also making investments and pursuing opportunities in adjacent markets where we see outsized growth potential.
As we talk to our clients, we believe that areas such as alternatives, sustainability, wealth management and cloud based data services will receive increased focus going forward. As a firm, we're making significant financial investments to aggressively capture these opportunities. 1st and foremost, we're making investments in our talent. BlackRock continues to attract some of the best technology talent in the world. Over the past 5 years, we've grown our Aladdin team by nearly 70%, and there are now 4,500 technologists across the firm.
In addition to talent, we're also making investments in Aladdin's underlying infrastructure. Probably the best example of this is the work we're doing to move Aladdin's technical foundation to run on Microsoft Azure Cloud. This is a multiyear initiative. It's well in flight and it's on track. And by partnering closely with Microsoft, we're already seeing several benefits that will accelerate the pace of Aladdin's innovation for years to come.
And lastly, we're making capital investments to accelerate our overall strategy by targeting acquisitions and commercial partnerships with leading Fintech organizations that we believe are going to significantly add to Aladdin's overall value proposition. So we've talked about Aladdin today. We've talked about the forward opportunity and the investments we're making towards strengthening our capabilities. Now let me pivot towards the future and our multiyear strategy to drive the next wave of innovation and growth. We spend a lot of time thinking about the needs of the investor of the future.
With our industry changing so rapidly, with client needs evolving so quickly, one thing I can say with certainty is that the investment process in 2025 is going to be dramatically different than what it is today. Individual business models across clients may vary, but we believe that the investor of the future is going to require these capabilities in order to be successful. The first is whole portfolio solutions. The fundamental nature of how portfolios are built is changing. They're becoming more complicated, more customized across both institutional and wealth management channels.
Clients are increasingly looking beyond traditional fixed income and equities to more diversified, resilient portfolios made up of all asset classes, both public and private. The need for technology that brings together this whole portfolio in one place and allows you to customize but do it at scale is increasingly important. Our 2019 acquisition of VeeFront, the industry leading end to end investment technology for private markets, has given us an unparalleled ability to bring public and private assets closer together as alternatives become a more prominent asset class in client portfolios and quite frankly, less alternative. With our Efront integration now complete, we're already bringing unique new capabilities to clients that allow investors to see their entire risk profile across both public and private instruments. We've seen strong demand for this innovation with 20 organizations using it today.
In addition to Efront, we're also focusing on building out Aladdin's accounting capabilities, recognizing that true scale comes from the ability to seamlessly manage portfolios across every step of the investment process. A second dimension that we're focused on is sustainability. We believe that in the coming years, the global focus on sustainability is going to have a profound impact on how portfolios are managed. That's why late last year, we announced Aladdin Climate, a new capability that will help investors understand climate risk as investment risk by bringing together industry leading climate science research with portfolio risk analytics and modeling. As the world transitions to a net zero economy, it's critical that investors understand the impact of their investment decisions through a climate risk adjusted lens.
Later on, my colleague Paul Bodner is going to speak about sustainability at BlackRock, including more details about Aladdin Climate. In addition to Climate, we're also supporting clients with ESG needs more broadly. Over the past year, we've added over 2,000 new ESG related data elements from leading data providers and formed a strategic partnership with an ESG analytics data company called Clarity AI to develop new tools to make it easier for clients to navigate the vast amounts of disclosure data to form their investment opinions. So the investor of the future will need technology that supports resilient and sustainable portfolios, but they'll also need for that technology to work seamlessly alongside all other aspects of their investment process. And that's why we've been focused on making Aladdin more open, more flexible to support more connectivity in different operating models at our clients.
As an operating system, Aladdin orchestrates all of the activities in the end to end process, much the same way the operating system on your phone just makes the apps work. Aladdin Provider is a great example of how we're doing this, making it easier for clients to exercise flexibility and choice without sacrificing scale and efficiency. Through Aladdin provider, we have partnered with 8 of the largest asset servicers to use Aladdin to create a more streamlined, standardized and efficient way for banks to exchange data and get closer to their asset management clients. Staying on the topic of data, when we think about the investor of the future, we recognize the opportunity to help them manage what is an increasing complex data landscape. Aladdin has always served as the center of our clients' investment data world.
But today, our investors have become more tech savvy. A new class of citizen developers and data scientists has emerged. A big part of the future is going to be about enabling them to innovate, not as a shadow IT organization, but as part of an integrated part of the process. We want to provide technology solutions that help bring traditional investment data with the increasingly large amount of non investment data in a way that just makes it easy to go, to generate unique analytics insights and at the end of the day investment alpha. That's a core thrust behind the Aladdin Data Cloud, a new capability we are building in partnership with Snowflake, an industry leader in cloud enabled data technology.
Aladdin Data Cloud is a next generation solution that will bring Aladdin and non Aladdin data together, so clients can nimbly access and use data across their organization, unlocking their full potential for collaboration, creativity and innovation. And lastly, as we think about the investment in the future, we continue to invest heavily in our wealth management capabilities. Across the globe, we're seeing demand for personalized, holistic advice in wealth management. Investors continue to seek goals based financial advice, which requires mass customization technology that's able to look at an individual's goals, their unique life circumstances and their existing portfolio. Following our launch of Aladdin Wealth 4 years ago, we've continued to invest in these capabilities to meet the changing needs of wealth managers.
Aladdin is now on the desktop of more than 38,000 wealth management professionals and in 13 countries, and we're building new capabilities to broaden our offering to do more for financial advisors, including new risk optimization engines to deliver highly personalized portfolios to literally hundreds of thousands of clients and creating data driven tools to help advisors provide tailored content to their end clients, leading to greater efficiency and more scaled customer engagement. So in closing, we're incredibly excited about Aladdin's opportunity to shape the future of asset management. Aladdin is uniquely positioned to deliver against the needs of the investor of the future. And as we execute against this strategy in the coming years, we're going to continue to listen to our clients. We're going to continue to innovate, and we're going to continue to invest in Aladdin so that we can deliver low to mid teen revenue growth well into the future.
Thank you very much for your time. And I'm now going to pass it off to Rich Kushel, who's going to talk to you about BlackRock's active management platform.
I'm Rich Cashel, and I'm Head of the Portfolio Management Group at BlackRock. Today, I'll be speaking about our Active Management platform and how it's changed, why investors are increasingly choosing active strategies and how BlackRock differentiates itself from other managers. You'll also be hearing directly from our investors on how BlackRock empowers them to deliver long term durable alpha for our clients. BlackRock was founded as a fixed income active manager with a strong risk management mindset. So active management has always been an important business for BlackRock.
But over the past few years, we've transformed the franchise into a growth engine. Our active AUM has grown by $555,000,000,000 over the past 3 years to $2,300,000,000,000 and our annual revenue has grown by $1,200,000,000 over the same period. Our active platform now makes up onefour of the firm's AUM, but half of the firm's revenues. And for the past few years, we've been able to outpace the industry's growth in active management because of strong performance, our focus on whole portfolios, innovative use of solutions like active ETFs and closed end funds and a focus on developing and retaining our talent. Now while we've seen notable growth in our active franchise, our market share of the active management industry remains low, and we believe there is significant room to grow.
Since 2016, based on McKinsey estimates, our share of the active management industry has grown to roughly 3%, still very low in a highly fragmented market. Our performance has led to an increase in Morningstar5 star rated funds, which has led to growth in our active AUM as these strategies have seen significant inflows. The growth of the active platform is an integral part of the firm's strategy. Over the past several years, we've taken steps to transform our active platform from incorporating data science to sustainability to new tools for portfolio construction. Active investing in BlackRock reflects our focus on continuous innovation and evolution.
Across everything we do and every strategy we manage, we look to leverage the strength of the BlackRock platform to see and understand what others can't to deliver durable alpha for our clients. Over the past 5 years, in the $1,300,000,000,000 of our liquid alpha seeking strategies across fixed income, equity, multi asset and alternatives, BlackRock's active businesses have added 786 basis points of cumulative alpha gross of fees for clients or 543 basis points net of fees. In aggregate, the clients invested in these strategies have received $49,000,000,000 in net of fee cumulative outperformance. Importantly, for every dollar clients in those strategies paid us in fees over the same time frame, they received $3.20 of alpha on a cumulative basis. And don't forget, what we don't include in our net new business numbers, every dollar of net alpha is an incremental dollar of fee paying assets.
So why do investors need active management now? Simply put, in today's low expected returns to beta environment, alpha is necessary for clients to achieve their return objectives. At the same time, turbulent markets and uneven liquidity give active investors the ability to capitalize on dispersion and inefficiencies within and across sectors. We see 3 persistent long term themes that present compelling opportunities for active investors. The first is sustainability.
The impacts from environmental, social and governance factors are becoming better understood, and there's an ongoing large scale reallocation of capital towards sustainable issuers. We believe sustainability factors are going to be increasingly incorporated into asset prices, and we're building the necessary capabilities and strategies and positioning our portfolios to benefit from this shift. 2nd, investors also require a greatly expanded investment toolkit to build resilient and robust portfolios. This requires capabilities across asset classes, regions and sectors across the entire capital markets. Finally, the growing importance of bespoke investment opportunities in the private markets across the capital stack and through the life cycle of an issuer.
So why are clients turning to BlackRock as their partner for active management? The simple answer is that we've delivered durable alpha for our clients over the long term, and based on our conversations, they believe we can continue to do so. Short term performance is important, but what really matters is the ability to deliver over the long term and through market cycles. Our Aladdin platform and our culture of risk management and informed risk taking are critical enablers of our platform, So we've embedded both across all of our alpha seeking investment processes. In addition, I'll highlight 4 key reasons why more and more clients are choosing BlackRock for their active investing needs.
The first is our ability to generate differentiated investment insights second, our leadership and sustainability thirdly, our advanced data analytics and technology and lastly, how we leverage our breadth and reach of the BlackRock platform. The single most critical differentiator in Active Management has always been people. People are at the heart of investment insight generation. And to generate unique ideas, our experts call on the diversity and depth of their experiences as subject matter experts. They supplement that with industry leading information flow.
We recognize how critical our people are to idea generation and have taken steps to retain, invest in and grow our bench of more than 1300 active investment professionals and 500 research analysts. This group has an average tenure at the firm of over 8 years. Across our investment platform, collaboration is critical, both in structured forms such as our daily global meeting and unstructured interactions across our distinct yet highly connected investment teams. The second reason clients are choosing BlackRock for active management is our leadership and sustainability. As society moves to a broader stakeholder approach and sustainability continues to become the market standard, we view sustainable investing as a long term and increasingly important driver of returns.
We believe sustainability and climate risk is investment risk, but it's also a large investment opportunity. Last year, we completed the integration of ESG considerations into all of our active strategies and have grown our active long term sustainable AUM to $54,000,000,000 right now. And beginning in February 2021, our capital market assumptions, a core input to building portfolios at BlackRock, explicitly reflect the impact of climate change on expected returns. We're also building tools such as Aladdin Climate to allow our investors to incorporate forward looking climate analyses into their investment decisions. And later this year, we'll begin to publish the temperature alignment of all of our public equity and debt portfolios.
The ability of all of our teams to identify, access and analyze large data sets is an important success factor for each of our investment teams. We pride ourselves on our use of technology and ability to turn data into research insights, designing unique ways to drive alpha. Technology and data analytics are really at the center of everything we do, and they're embedded into the day to day lives of our investors across all styles of active management. Data scientists sit within our investment teams, facilitating our investors' ability to turn data into investment signals and insight. We have more than 100 alternative data sets integrated into our research platform and in excess of 1900 developers and product managers dedicated to our Aladdin platform.
The last reason is how we leverage our scope to efficiently invest across regions in multiple asset classes and disciplines in size while still remaining nimble. Aladdin, our portfolio management and end to end operating system for investing, allows us to manage risks and importantly, implement investment ideas at scale. It's our operations and technology infrastructure which allow our investment and trading teams to deliver on informed risk taking with reduced transaction costs. We increased the capacity of our investment teams by giving them access to world class sourcing and trading and, where needed, dealer balance sheets and financing. Our dedicated capital market teams partners with our investors to source unique investment opportunities across multiple channels.
And in the $5,200,000,000,000 issued in the primary markets in 2020 across equities, credit and emerging markets, our teams put $178,000,000,000 to work or 3.5 percent of all issuance globally. Our trading platform increases the efficiency of our investment teams and handled over $85,000,000,000,000 notional amount in 2020, processing an average of 84,000 trades per day. Now I mentioned our people as the single most critical differentiator, and I want to mention it again. Our platform brings powerful competitive advantages, but at the end of the day, it's having the best people who understand how to leverage these advantages to deliver durable alpha. Now you're going to hear directly from our investors about how BlackRock's platform helps them deliver alpha for our clients.
What we're trying to create at BlackRock for clients is durable, consistent return, durable alpha, if you will. And how do you do that? I mean, the first thing we do is we take all the information flow, all the ideas and research and analysis we get across the firm, try and meld that together to think about what's the regime we're operating in. Once you have the regime now, then you can think about asset classes. So you think about asset classes.
Let me think, okay, I've got the right asset classes hopefully. And then I think about what securities, where regionally do we want to go, where do we think about sectors, what part of the capital stack. We utilize the resources all around the institution and think about where we go, where's the best place to get it. And then I think the key and I think the key going forward for investing is how do you put those pieces together, portfolio construction, how do you use Aladdin, how do you optimize return and using 21st century analytics, data, portfolio construction tools, put it together in a way it's very hard for somebody to do on their own, put them together in a way that's really efficient. And then last thing is think about how do you risk manage that.
And one of the things that I think the firm and being within this organization is extraordinary is how do you risk manage, how do you stress test, how do you scenario analyze,
how do you return attribute,
how do you bring it all together and say, gosh, this is working, this isn't do it on a daily basis and do it over and over and over again. You put all those pieces together, I think that's how you create durable alpha for clients and consistent return over time.
We have a mandate to deliver alpha to clients year in, year out regardless of cycles and at scale. And to deliver on that, we need to predict corporate earnings just that little bit better than the stream. And we talk about 2 worlds. We talk about spreadsheet land, the mythical land where every company always grows its earnings and the real world where companies don't. And the further we look out, the bigger the gap between those worlds becomes and arbitraging that gap is the job.
That's the alpha. And to do that, we've got all the tools you'd expect: fabulous corporate access, sell side access, prime broker relationships, data specialists, just all of it. But we've also got a capital markets team sourcing opportunities that others can't access. Private companies love having BlackRock on the register. We have boots on the ground visiting companies everywhere from semiconductor start ups in Shenzhen to solar projects in Peru.
And all of that insight, all of those differentiated stock ideas are part of the massive cross platform information sharing that we do. And what does that look like? It's about knowing in January that restaurants in Singapore are seeing spend per cover 20%, 30% above pre pandemic levels just as the U. S. Is reopening.
It's about knowing the likely future configuration of data center chip architecture. It's figuring out what data from the Permian is telling us about shale productivity trends and how that's going to affect the oil cost curve. And even with all that, we'll only ever be right a bit more often than we're wrong. But that's all it takes to deliver alpha, durable alpha for our clients.
Active sustainable investing involves deep company and sector research, flexible ESG frameworks and active ownership. How does this happen at BlackRock? Firstly, we house broad research teams. We dive into sector and company nuances. They work alongside growing ESG teams, which employ climatologists, energy system modelers, public policy and other sustainability experts, a powerful combination that allows us to identify the leaders across asset classes.
Examples include green bonds, countries building renewable capacity or the companies designing the green tech solutions of tomorrow. Secondly, data. We access all the ESG data we can source, externally and internally, structured and unstructured. We make this data available in digestible ways to investors through the magic of Aladdin. Our ESG data and sustainability tagging is found at PM fingertips in the system.
This allows for very granular ESG reporting, climate risk analytics and impact mapping. From that, we can make the connection to performance. Our risk teams measure where ESG adds alpha, where it doesn't, where it adds resilience or measurable social impact. Finally, we are an active sustainable owner. Benefiting from our market leading stewardship team and through direct investor dialogue, we both get behind the ESG data to the company story and encourage more sustainable behavior, serving oftentimes as a protagonist for change.
All of these aspects of the BlackRock resource space allow us as active investors to operate at deep scale across what is an evolving sustainability landscape.
Alternative data is now a key component of the investment research mosaic across all active investment teams. Crucial to this has been ensuring we get the most relevant data to investors in a digestible and seamless fashion, meaning that they are equipped with everything they need to enable informed risk taking. We want to come to the best possible data driven decisions faster than competitors, leveraging the most relevant data whether external or proprietary. To enable this, we have developed a hub and spoke model across our active platform. The hub called Data Strategy and Solutions or DSS enables scale solutions in the sourcing and onboarding of data as well as the ability to share best practices across investment teams.
They work closely with the spokes, data leads who sit directly within investment teams. Our scale allows us to identify the best data sources whether internal or external. The key is the proximity to the teams that the data leads have, meaning alignment with portfolio managers and analysts and knowledge of the investment questions that are being addressed. This leads to better investment decisions being made on behalf of clients and turns that data into alpha. Some examples of how this works in practice.
As economies reboot, we've been able to monitor the stickiness of home food delivery trends that many of us have been utilizing through lockdown. We're able to detect consumers' willingness to travel through hotel reservation data and airline ticket prices. We're able to monitor consumers' openness to engage with one another by looking at entertainment platform web activity for events such as concerts. And we're able to look at employment trends at the corporate level, a real asset test to how convinced corporates are that the initial reopening reboot will be sustained. All of these are examples of real time, real source data from sources other than corporates, and they've enabled investors to get greater conviction in investment ideas, supporting them in delivering durable alpha for clients.
Data and technology are critical to the success of the BlackRock investment process. Across portfolio management, we think of technology as the common language that brings us together. It's how we can bring together investors with different investment styles, products and asset classes. It's how we can collaborate among investors with multidisciplinary backgrounds, whether it's political science to economics to computer science to math. It's how we're able to come together to develop large scale infrastructure that can forecast election results by combing the web for social media attention, that can machine read tens of thousands of news articles a day to evaluate geopolitical risk, that can use millions of bills of lading from every major port in the world to identify supply chain tightness.
BlackRock's incredible scale is what gives us the singular ability as a firm to develop technology infrastructure. But that's not all it does. We also unite that technology together with our domain expertise in our markets and our specific products. The way we use natural language processing, for example, to tap into trends in local retail trading in China is very different to how we use mobile device geolocation to track post COVID reopening trends across Europe. The way our systematic portfolios use technology to develop broad repeatable signals to trade companies is pretty different to how our fundamental investors use the same data and the same modeling techniques to understand individual company fundamentals at a very deep level.
Only at BlackRock can we combine this massive technology platform and specific market and product expertise to generate that unique alpha. It's one unified platform built on the common language of technology, leveraging the diversity of ideas and market expertise of our portfolio managers to develop differentiated insights and produce that durable alpha for our clients.
One of the myths that I think exists about BlackRock is that our size means our active investors aren't able to reposition their portfolios in a nimble and efficient manner. As one of those active investors, I can honestly say that the reverse is true. For example, working closely with our derivatives trading desk during the volatile markets last March allowed us to rapidly build significant protection into our clients' portfolios in an effective and profitable way. A key part of this is the connectivity we have with our trading desks. Many of the daily global meetings kick off with insights from one of our traders and their regular attendees across the various teams' investment discussions.
These close links, combined with a laser like focus on minimizing transaction costs and market impact, mean that it's an area I think we can actually add alpha for our clients over the long term. Another area where our scale is becoming increasingly important is working directly with companies to address their financing needs. This provides great opportunities for us to add alpha for our clients that might not otherwise exist and is across both equity and fixed income markets and with public and private companies. We're finding that the long term relationships we've built up with senior management over many years means that we're regularly the first call when they're thinking of raising capital or issuing debt. These discussions often result in BlackRock being a cornerstone investor in any issuance and in some cases, being able to completely satisfy the company's needs.
Outcomes, we benefit both the company in question and our clients.
Our ability to generate differentiated investment ideas, our leadership and sustainability, our ability to turn data and technology into investment insights and how we leverage our breadth and reach are all examples of how we've transformed our platform to drive investment results for our clients. The single biggest reason clients choose BlackRock for their active needs is our ability to continue delivering outperformance over time, what we call durable alpha. And as we do this, we're able to attract, develop and retain great investors who want to be part of this platform. This is the positive cycle we've created and why we believe investors should feel confident in our ability to continue to generate attractive growth. Thank you very much for your time.
I'll now pass it over to Martin Small to talk about how we're powering the financial advisor portfolio of the future.
Hi, I'm Martin Small, Head of BlackRock's U. S. Wealth Business. BlackRock manages $2,000,000,000,000 for U. S.
Wealth managers and is represented in every corner of the advisors portfolio. In 2020, our diversified product platform generated $1,000,000,000 in net new business and 45 plus offerings. BlackRock is becoming digitally embedded in advisor portfolio building. Approximately 15% of the industry's advisors logged into our web based advisor center in 2020, 80% of which were return users. Advisor Center places Aladdin risk tools and BlackRock model portfolios on advisor desktops, making it convenient to tap into our insights and do business with BlackRock.
From 2016 to 2020, BlackRock propelled over $750,000,000 of cumulative base fees via U. S. Wealth managers. Almost 40% of BlackRock organic base fee growth is now coming through U. S.
Financial advisors and we see great momentum ahead. All client segments from wirehouses to independent broker dealers to RIAs are logging consistent 5 year growth rates of 5% to 11%. BlackRock's last 12 months of organic growth in these segments matches or exceeds advisor industry growth, suggesting we are growing share. What's changed significantly in the last 5 years is a move from commissions dominated to approximately 50% fee based financial advisor practices. Fee based advisors are a large and fast growing segment.
They embrace tax and cost efficient portfolio building blocks. They bring together active index and factors. They blend the total opportunity set of public and private markets. These portfolio building behaviors are favorable for BlackRock. Over the past 12 months, we delivered on average double digit organic asset growth across our managed products by serving the whole portfolio.
We're a leader in high growth markets like ETFs and in tax managed SMAs via our combination with Aperio. And we're consolidating share in historically underpenetrated markets for us like active mutual funds with a trailing 12 month growth rate of 12%. But consider this, per Symfund, BlackRock has approximately 2.2 percent AUM share in U. S. Mutual funds, approximately a $13,000,000,000,000 market.
To dimension the upside opportunity, at our 2020 average mutual funds fee rate, a 1% share gain is equivalent to over $700,000,000 of new base fees. We're seeing advisors over several quarters allocate new money to products that offer tax, access and expense efficiencies. For example, 80% of new money in Q4 2020 went to ETFs, SMAs and cleaner share class mutual funds. BlackRock is a leader in these key categories. First, ETFs.
IShares ETFs are growing as substitutes for single securities. IShares is growing through the adoption of model portfolios and iShares is growing from indexing innovations available to advisors in fixed income and sustainable. 2nd, mutual funds. Although advisors have been shedding mutual funds on net, on closer examination, you'll see that fee based advisory friendly share classes and 4 5 star rated funds are logging attractive growth. In the Q1 of 2021, BlackRock became the number one wealth market mutual fund provider based on net flows with 17% annualized organic growth.
We've also become the leading active equities manager, up from number 550 in 2017. What Rich Cashel described as durable alpha combined with strong distribution is bolstering our leadership position. Last, SMAs. With over $140,000,000,000 in SMAs, BlackRock is a market leading whole portfolio sponsor. Our combination with Imperio enhances our ability to deliver personalized tax managed SMAs.
With the prospect of higher income and capital gains taxes, we've built a pipeline of over $6,000,000,000 in potential new Imperio mandates just since the transaction closed. We also anticipate that advisor focus on tax will continue to drive demand for our municipal bond SMAs. Let's briefly hone in on ETF growth through models. Model AUM is expected to more than double over the next 5 years to 10,000,000,000,000 We're now driving $1,000,000,000 per month in BlackRock managed models on the Envestnet platform. We're also growing as the industry embraces models more generally.
In 2020, 2 thirds of our revenue growth on Envestnet's managed accounts platform came through BlackRock products used as component parts in models managed by others. We grow through distribution of our own models as well as through distribution of third party models. Up until now, I've told you chiefly about our near term momentum. Let's look to the horizon to see how BlackRock can power the winning advisor portfolio of the future. Our ambition is to move the industry from a public markets, pretax returns measured cookie cutter sixty-forty portfolio to a fifty-thirty-twenty digitally enabled portfolio that blends 80% public and 20% private markets.
It's a portfolio that places tax smart investing at the center of investor outcomes and a portfolio that is personalized. It's 1 size fits 1. Perhaps most important, it can be produced and managed at scale through technology. Here's a few more notes about this fifty-thirty-twenty portfolio of the future. First, alternatives will be less alternative.
Per Cerule at 1% to 2% allocations, private markets are just underrepresented in financial advisor portfolios. Our analysis suggests that better outcomes can be had with allocations of up to 20%. We've launched new interval and closed end products accessing private equity and private credit. These innovations ease access to alternatives. They are more tax friendly for the emerging and mass affluent.
As a proof point, our innovative closed end fund offering simplified access to pre IPO markets, raising $11,000,000,000 in new assets over the past 2 years, which we estimate has generated $700,000,000 in net present value to the firm. 2nd, the portfolios of the future are personalized, one size fits 1 for households. Examples of this personalization in action are advisor customized models with Aladdin enabled tax overlays and personalized SMAs that blend tax management and values alignment across ES and G. We're excited about our future in the U. S.
Wealth market. By helping wealth managers build better portfolios, we aim to improve financial and retirement security outcomes for millions of American households. We're investing to bring the portfolio of the future to life through human and digital capabilities as well as product innovation. So long as we continue our track record of being the trusted advisor to the financial advisor, we're confident that we can help advisors grow and that BlackRock will grow right alongside them. With that, I'll pass it over to my good colleague, Stephen Cohen, who will talk about how we're powering the portfolios of the future in the EMEA region.
Thank you.
I'm Stephen Cohen, and I'm the Head of the EMEA region for BlackRock. You've heard from Martin the importance of the whole portfolio in the U. S, and I will now share how we are leveraging the scale and breadth of the firm to drive the whole portfolio here in EMEA. With $2,400,000,000,000 in assets under management, we're the largest manager in the region, generating nearly $5,000,000,000 of revenue in 2020. Both of these are around 30% of the firm.
And over the last 12 months, our organic growth rates of assets and base fees have been 9% 17%, respectively. This growth has been driven by accelerating adoption of ETFs and alternatives, cash and the resurgent performance of our active platform. My 5,300 colleagues from 94 nationalities work in 25 cities, serving clients across 72 countries, and I'd like to recognize the tremendous efforts of everyone across the region through the difficulties of the pandemic. Deepening our local presence is key to our long term success. We have added new offices over the past 3 years, including Belgrade and Riyadh, and our European assets have risen from 45% to 55% of the region.
The industry in which we and our clients operate is going through a rapid transformation, the drivers of which have been accelerated by COVID. 0 or negative interest rates and government bond yields mean that savings accounts and traditional income sources are no longer able to deliver retirement needs. Our clients face new regulations such as pension reform or MiFID II, which came into being in 2019, requiring greater transparency fees and suitability in the wealth market. More localization, not just the impact of Brexit, but the rising expectations of the role all businesses play in their local communities. Digitization, we've all got used to working via video conference, but the impact of COVID on the wealth industry here is profound.
Over the past 12 months, 3,500,000 new online brokerage accounts have been opened in the U. K. And Germany alone, and online trading is 5 times pre COVID levels. We expect that the online investing culture that helped accelerate ETF adoption in the U. S.
Will also take hold in many parts of EMEA. And cutting across everything is sustainability, where EMEA is at the forefront. Web searches for sustainability across the U. K. And Europe have risen 50% over the past 24 months.
For our clients, this means 3 things: 1st, embedding sustainability in everything they do, from portfolios to risk management to brand second, finding more efficient ways to service clients. For example, fee based represents approximately 20% of the wealth advisory space today. We believe it will form the majority of adviser assets by the end of the decade, driven by MiFID II and end investor preference, and future engagement with end clients will have to be digitally enabled. And third, rethinking their investment propositions and the technology needed to drive them. In Wealth, this means centralizing portfolio construction with CIO teams, building model portfolios around themes and investor values and adapting new technology to customize at scale.
In Institutional, it is accelerating the shift from defined benefit to defined contribution pension plans in the U. K. And the Netherlands, and we expect other markets will follow over time. Within insurance, pension scheme buyouts and changing with profits and unit linked offerings drive the growth of streamlined and model based portfolios. The diversity of clients we serve in EMEA means there is no one portfolio of the future, but there are commonalities where the future is heading.
It is one which has sustainability at its core, is digitally enabled and more diversified across public and private markets as the alternatives market grows 25% to $5,000,000,000,000 by 2023. For me, there is a parallel for this transformation with what the entertainment industry has experienced. Historically, we made content and packaged it for portfolio managers to use or distributors to sell. But in the same way, content providers became distributors and distributors' content providers. How that investment content is packaged and utilized and the technology needed to manage and deliver it is changing, breaking up the traditional roles of who does what.
Our evolving role is as a strategic partner, a partner who can bring a range of services from consulting on portfolio construction and model portfolios to technology to new investment solutions. Take consulting. Our specialist teams have worked with over 1,000 clients in the past 3 years to help them make the portfolio transitions they need. And in the past year, 50% of these engagements have been specifically focused on resolving ESG challenges. The managed models market in EMEA is a quarter the size of the U.
S. But set to grow. An example is ETF savings plans, simple portfolios of ETFs digitally delivered and growing at 45% a year. IShares has partnered with banks and wealth managers to develop this area, and we expect them to become a key way to convert savers into investors in Europe. And as our conversations with clients move to where they want to focus and where they want to partner, we are now helping them build whole new propositions, not just portfolios, tailored solutions that use our scaled operating platform for bespoke funds, manager selection and portfolio management.
These propositions go beyond just managing assets to blending investments, technology and marketing. Across the region, clients are upgrading old technology to meet new regulatory and business model needs, whether that is risk management, especially in sustainability or helping to drive scale distribution, Aladdin and Aladdin Wealth are increasingly core components of new partnerships. As is helping clients activate their new propositions through marketing support, education of sales teams and using the power of our brand. And while every solution is unique, ESG is increasingly a standard consideration. No matter what the solution, all of this starts with understanding our clients' purpose and goals.
And two stories I'd like to share show how this is creating enduring partnerships and propelling our business. The first is a Dutch retail bank. Like many retail banks and wealth managers, they have been facing greater regulatory costs and need to differentiate their investment offering and integrate ESG. Working together, we were able to structure a new tax efficient proposition for their end clients, embedding ESG in line with their policy guidelines, all supported by Aladdin Risk Technology and Marketing. We see significant opportunities in the $11,000,000,000,000 wealth market to develop solutions with clients over the next 5 years.
And BlackRock is unique in being able to bring together multiple capabilities across investment management, ESG integration, technology and marketing. The second is in the U. K, where the pensions landscape is undergoing huge change with outsourcing of CIO capability, the fastest growing part of the market. AUM in the UKO CIO market has doubled over the past 5 years to $275,000,000,000 growing at 15% a year. The same trend exists in the Netherlands and is in early stages in Germany.
We have recently worked with some of the largest U. K. Pension schemes to help them reach their funding objectives and secure their member benefits. Many are finding that as their schemes evolve, so do the skills needed and the complexity of managing internally rises. For example, we partnered with 1 client to create a full outsourcing solution with individual strategic asset allocations tailored to their funding objectives and liability profiles, integration of their ESG and responsible investment policies and a bespoke service model to meet the needs of their trustees, all of which enhance their ability to provide their members with improved investment outcomes.
And again, BlackRock is leading the delivery of these solutions to manage complex plans in line with bespoke client needs. Regardless of our client needs, our global scale and the breadth of capabilities we bring across investments and technology, coupled with our local presence, talent and expertise, means we are uniquely positioned to be their partner on this journey. Thank you. And after a short break, Rachel Lord will be discussing the opportunity in China.
Welcome back, everyone. I'm Rachel Lord, and I'm the Head of the Asia Pacific region for BlackRock. I'm going to give you a quick tour of our business in APAC and then turn to the particular growth opportunity that we are at the early stages of executing in China. BlackRock is the largest asset manager in the Asia Pacific region, managing approximately $800,000,000,000 of investments for our clients and generating revenue of $1,600,000,000 We've seen strong flows over the last 12 months with 17 percent organic asset growth and 12 percent organic base fee growth. We're also seeing a rapid acceleration in ESG investing by our clients and are building some innovative strategies such as the decarbonization fund we've launched with Temasek.
In the last year, our sustainable AUM has grown by over 50% in the region. And based on the quality and quantity of conversations we are having with our clients, I expect this trend to continue. BlackRock in Asia is founded on 2 large businesses in Japan and Australia. Around 70% of our assets in the region are managed for clients in these two countries, predominantly in the retirement and superannuation markets. Growth in Australia is expected to come from the transformation of the superannuation industry following regulatory reforms, creating significant solutions and partnerships opportunities.
In Japan, we see growth coming from investors' continued search for return and yield from both global exposures and private markets and also from the need to secure adequate retirement income for Japan's aging population. The Japanese wealth market is also ready for changes along the lines of the European and U. S. Experiences of the last decade to drive a whole portfolio approach powered by technology. In India, our presence is limited to our innovation hubs, with our 1800 employees there playing a key role in BlackRock's global operations.
We manage our business in Southeast Asia from Singapore, and we've seen strong flows in recent years as the demographic and economic environment creates positive tailwinds for our industry. We see this region of over 650,000,000 people as a significant growth opportunity, particularly in sustainability and real assets investing. Hong Kong, where I am based, is our regional HQ. The city remains a global financial center with sophisticated capital markets and deep talent pools and acts as a center for regional wealth and a vibrant institutional market. But the most exciting single market in the Asia region and the one I would like to focus on today is China.
With the population approaching 1,500,000,000 people, China is likely to become the world's largest economy before the end of this decade with a stated ambition to double its GDP by 2,035. The country has been opening its markets and undergoing a transformative financial and policy reform agenda with an emphasis on quality over quantity. The objective of their reform is simple: to create a stable and resilient financial system for the country while improving the environment and delivering economic well-being for their people. However, allocations to China by global investors have trailed economic growth in the development of its capital markets. The geopolitical tensions and global strategic competition, particularly between China and the U.
S, can make investing in China challenging for international clients. Today, non Chinese investors own only 3% of the country's equities and bonds. So in a nutshell, global investors are very late in discovering an economy that has already reached critical importance. Our clients are increasingly asking us for help in understanding the Chinese market and in rebalancing their portfolios to increase their exposure to the country. Domestically, China is facing demographic challenges with one of the lowest fertility rates in the developing world and a swiftly aging population.
Despite a very high savings rate in the country, retirement assets in China represent only 13% of GDP compared to over 200% in the Netherlands or 130% in Australia or over 50% even in Japan. It is clear why China's retirement challenge represents a pressing social and economic priority. And the country is responding by building out a 3 pillar retirement system to support long term financial stability and also by focusing on the need to help savers become investors. We can play a role in this shift today because of the opening up of China's onshore asset management market, which had been largely closed to non Chinese managers until the recent reforms. Today, this market is the 3rd largest in the world after the EU and the United States, and it's growing rapidly, outpacing all other major markets.
We are now able to build majority owned domestic businesses for the first time, bringing our expertise in asset and risk management onshore. Our ambition is to be at the center of all client considerations around China, and our strategy to achieve this is twofold. The immediate opportunity is to help global clients to invest in China. Capital market assumptions from the BlackRock Investment Institute forecast that return expectations from Chinese equities and bonds are set to outpace developed markets due to relatively high earnings growth, equity risk premia and bond yields. In Private Markets, we are seeing a strong set of opportunities for the experienced investor, for example, in Chinese private credit, real estate and private equity.
And China's commitment to a net zero economy by 2,060 is an important step, which we believe will play out in multiple industries such as technology supported by Green Finance. In the last 12 months, we have grown our global client assets investing in China by nearly $20,000,000,000 giving us roughly 20% of this category overall. We have a market leading fixed income offering, strongly performing active equity products across fundamental and systematic strategies and a significant and growing ETF franchise. For example, one of our UCITS ETFs that provides exposure to Chinese bonds grew from $1,000,000,000 in AUM last September to over $10,000,000,000 last month. China now plays a pivotal role in portfolio construction for investors, and we can meet their needs across asset classes, styles and vehicles.
As our global clients become more familiar with China's investment landscape, we expect their appetite will diversify as well as grow. So we have deepened our research and investment capabilities across public and private markets to position for this and plan to extend our offerings into innovative areas such as Impact Investing, to meet the demand from our clients. The second opportunity, which is longer term in nature, is to become the preeminent global asset manager onshore in China, and there are 3 parts to this. Firstly, we have recently received final regulatory approval from our majority owned wealth management company. This is a joint venture that we formed with our partners, Temasek and China Construction Bank, the world's 2nd largest bank.
This joint venture will serve China's growing mass affluent population as they step out of cash and cash like products into more risk based investments. The products we launch will be open end funds designed to deliver stable returns over medium- to long term investment horizons and will be sold to CCB's 400,000,000 customers via its digital platforms and in its 14,000 branches. We are focused on aligning BlackRock's risk and asset management expertise with CCB's distribution scale, its domestic brand and its proven leadership in technology. CCB also has a strong track record in forming successful joint ventures with international partners, and we are running at full steam to launch our first product later this year. Secondly, we are in the process of setting up a wholly owned fund management company, and we expect to receive final regulatory approval this year.
This entity will offer mutual funds investing in onshore exposures across asset classes to Chinese investors. Our funds will be sold by distributors like banks, brokerages and digital platforms on an open architecture basis, just as we do in many other markets across the globe today. Over time, this entity will expand to also offer ETFs and segregated mandates to domestic investors and institutions. We see the FMC and WMC licenses as highly complementary rather than competing initiatives. The FMC will provide industry leading offerings to clients onshore who are already experienced investors and who value BlackRock's track record and expertise.
The WMC will help to transform a market of savers into investors by offering them a convenient first step into risk based capital markets products. And finally, we are committed to helping China overcome its mounting retirement challenge. Helping Chinese citizens to retire with sufficient provision for old age is a goal for the regulators and for China's broader financial services system. This will require building a long term investing culture. We are working to develop products which balance the need for higher returns with local investors' desire for capital protection, and we look forward to bringing these to market.
So this strategy of being the world's leader in investing in China to benefit global clients and of building onshore businesses to meet the retirement and investment needs of the people of China represents one of the biggest growth opportunities we have seen in Asset Management. We are incredibly excited about the long term potential in China, and I am personally excited to be back in Asia to help in this effort. I'll pass over to Mark now, who will talk in more detail about retirement.
Mark McComb joining you all here. I'm BlackRock's Chief Client Officer and I also serve as our North American Head. Now I'm really hoping that over the course of the next 10 minutes, I can shed some light on one of the most pressing societal issues of our time and what BlackRock is doing to help address it. Of course, I'm talking about the global retirement crisis, which has only been exacerbated by the pandemic over the last 12 months. The images we've all seen around us of food banks, job insecurity and health care concerns have reminded us that around the world, many people are anxious and suffering.
Now for some, these concerns are dire and immediate. For others, the hardship could be more gradual. But long term, many people's financial well-being is very much at risk. Today, for example, in the United States, 10,000 people are retiring every day. And around the world, the global population aged 65 or older will actually skyrocket to over 2,000,000,000 by 2,050, a historic first in which older adults will actually outnumber the young.
Now as an industry, we have a responsibility to do more to address this crisis. And as the world's largest asset manager, BlackRock has been at the forefront of innovation and change on this front. So let's take a look under the hood at the retirement industry. The global retirement market has 2 kinds of employer sponsored plans. The first are long standing defined benefit plans.
It's a $15,000,000,000,000 global market.
Now as
we all know, these have been in secular decline since pretty much the mid-1990s as fewer companies offer them and retirees draw down on their savings. On the other hand, the defined contribution market is one of the fastest growing parts of the retirement industry. In fact, the global defined contribution segment is now about the same size as the global defined benefit industry. The vast majority of this, around 2 thirds, sits here in the U. S, where assets are projected to grow 5% annually over the next 5 years and beyond.
Globally, we believe that the growth potential for the defined contribution market is also significant as more companies provide these plans for their employees and more countries pivot to a self directed retirement system. So what does this mean for BlackRock and the clients we serve? Let me give you a quick snapshot of our position in this space today. Well, with 13% market share in the U. S, we're the number one investment only defined contribution provider.
It's a concentrated market with more than half the assets controlled by just 5 players. We serve 72,000 defined contribution plans, which includes 60% of the Fortune 100, ultimately reaching 40,000,000 people from a vast array of employers, including the likes of Levi's, Walmart, Cleveland Clinic and UPS, to name just a few. Importantly though, we're an industry leader not just in scale, but also in innovation. In fact, we pioneered the Target Date Fund back in 1993, which for reference eliminates the guesswork for retirement savers by automatically adjusting their investment mix over time. When we created this concept, it was revolutionary.
Fast forward 20 years and target date funds are now the default investment of almost every defined contribution plan in the U. S, capturing over 80% of all new contributions. Today, our LifePath target date franchise has over $340,000,000,000 in assets, having grown an astounding 70% since our last Investor Day presentation 3 years ago. We have the industry's broadest array of target date offerings, and we also offer the number one provider of custom date target funds, bringing together our research and analytical capabilities to build solutions that meet the client's specific needs. Perhaps most critically, we're the only provider in the industry to have a truly global footprint.
LifePath has been adopted in 8 countries so far, and we are continuing to see global expansion as one of our greatest opportunities for growth in the future. Our active franchise represents another area of current as well as future growth for our defined contribution business. You heard earlier from Rich about the strength of our active platform, and we're bringing these solutions to our defined contribution clients both as a target date option and in the core menu. In fact, in 2020 2021, over 90% of our net new base fees has come from active products, including target date. At this time, let me share 3 specific areas of innovation that are further out on the growth horizon for us.
So let's start with China. As you just heard from Rachel, China represents a key strategic growth opportunity for BlackRock. Of course, just as the U. S. Faces a retirement crisis, so does China.
We see this in the recent census data. In addition to coping with increasing longevity, the country also faces a contracting labor force and underfunded state pensions. At the same time though, China must drive a mindset shift among its people to ease them into investing. The Chinese government realized they needed to evolve their market for retirement investing, and we're leveraging our knowledge, understanding of the retirement industry and unparalleled credibility in the space to help. We believe our life cycle investing models provide a strong basis for the potential solution.
And our ability to help address this challenge of retirement for millions of people in China is a significant long term growth opportunity for BlackRock. Now another area in retirement that's ripe for innovation is sustainability. Throughout the day, you've heard my colleagues talk about the growing client demand for ESG. Ironically, while that's absolutely true, adoption in retirement products has significantly lagged due in part to regulatory hurdles. Interestingly, this is starting to change and this shift is expected to propel BlackRock's growth as we're a leader in this space.
So what are we seeing at the moment? Well, in the United Kingdom, for example, we have rapidly expanded our LifePath ESG footprint from 17% of assets in 2019 to 53% today. Meanwhile, in the U. S, we look forward to continuing to work with the Department of Labor on making it easier for those saving for retirement to invest in ESG going forward. Of course, this is a process and a journey.
Some countries may be further down the line than others, but we certainly do believe that demand for ESG solutions will continue to grow over time. Now turning to my 3rd and perhaps most exciting example. There is perhaps no greater need in our industry than lifetime income in retirement. It's an unfortunate consequence of the shift from defined benefit to defined contribution that more and more people are now on their own to fund longer retirements. It puts a massive bonus on the individual saver, the teacher, the nurses, the retail worker to first build up their retirement nest egg and then subsequently to spend, but not overspend over the course of a multi decade retirement.
But the industry struggled to find a satisfactory decumulation solution until now. We developed and launched a new solution, which we're calling LifePath Paycheck. By embedding a deferred income annuity into our LifePath target date strategy, it provides the option for guaranteed income at retirement. In effect, it provides employees a type of pension, a paycheck for life, if you like, without the employer taking on more liability. Of course, we knew the investment solution was only half of the equation.
We also needed to shift mindset from focusing on lump sum savings to thinking about an income stream in retirement. That's why we developed a digital platform with an intuitive user experience that encourages positive savings behavior and streamlines the annuitization process. Driving this kind of change required a huge degree of collaboration across the industry. We knew BlackRock was the right firm, in fact, the only firm, which could lead that charge. On the Investment Solutions side, we were proud to enlist 2 leading insurers, Brighthouse Financial and Equitable.
Our partnership with Microsoft was instrumental in bringing the technology platform to life. And beyond those two examples, we worked across the entire retirement ecosystem, including record keepers, consultants and advisors to advance this innovation. Now we've seen incredibly strong support from leading investment consultants who after comprehensive due diligence have expressed high conviction in this new solution. It's a hugely important step in building momentum for new innovations. And with a strong client pipeline, we believe this is only the beginning for LifePath Paycheck.
As employees increasingly focus on their employees' financial security and retirement, we really expect to grow market share in the future. So from China to sustainability to retirement income, I believe we're planting the seeds for innovation in the retirement space for years to come. To close, let me reiterate the why. The retirement crisis is not just a global one or an existential one. What makes it so threatening is that it's also a silent crisis, going largely unmentioned in the media and in global conversation.
This may be the status quo, but it's far from acceptable. At BlackRock, we're committed to helping clients retire with dignity as they enjoy longer and healthier lives. Together, we're working to build a better retirement for all. With that, I'd like to hand it over to Paul Bodner, who will present on BlackRock's sustainable investing capabilities. Thank you.
Hi, my name is Paul Bodner and I'm BlackRock's new Global Head of Sustainable Investing. You've heard from my colleagues throughout the day on how BlackRock is evolving and innovating to stay ahead of client needs. This mindset and commitment is embodied by the way we approach sustainable investing across our entire business. BlackRock's deeply held investment conviction is that integrating sustainability can help investors build more resilient portfolios and achieve better long term risk adjusted returns. That's why in 2020, we moved decisively to make sustainability integral to the way we manage risk, generate alpha, build portfolios and pursue investment stewardship.
Our focus on staying ahead of our clients' preferences in sustainability, combined with our ability to leverage our global whole portfolio platform is resulting in differentiated organic growth.
As of
the end of the 1st quarterillion of net inflows into sustainable strategies over the last 12 months, representing 50% organic asset growth and 158 percent organic base fee growth. Sustainability is becoming an increasingly important component of BlackRock's overall growth. In 2020, 21% of net new base fees came from sustainable strategies, up from 10% just a year earlier. But the shift towards sustainable investing globally and BlackRock's ability to deliver client solutions is just beginning. We are seeing clients of all kinds tilt their investments towards sustainable strategies in greater magnitudes than ever before.
In 2020, sustainable ETFs and mutual funds saw an organic growth rate of 27%, almost 10 times the overall ETF and mutual fund industry growth rate of 3%. And BlackRock generated 64% organic growth in sustainable AUM over the same time period, well in excess of the industry growth rate and representing a leading market share. We expect this rapid industry growth to continue and believe BlackRock is well positioned to continue leading the market. BlackRock's $68,000,000,000 of 20.20 net inflows into sustainable strategies were diversified and positive across all asset classes, investment styles and regions. The majority of demand came from equity strategies and through ETF vehicles.
And by region, we're seeing greater flows from European clients. We are taking a comprehensive approach to sustainability across a full range of environmental, social and governance factors and across every part of our firm. Our most recent commitments, which we publicly outlined this past January, are designed to help our clients navigate the transition to a net zero economy, a transition with significant implications for both our clients and our shareholders. BlackRock's own analysis confirming that of many others shows that unchecked greenhouse gas emissions would negatively impact economic growth by as much as 25% over the next 2 decades with broad based implications for our clients' portfolios. The stark reality of climate science is why we're seeing a global consensus around the goal of achieving net 0 greenhouse gas emissions by 2,050 and importantly cutting emissions by half by 2,030.
Variations of these goals are now the official policy of the United States, the European Union, Japan and other major economies. Avoiding the most dangerous impacts of climate change will require accelerating the rate at which the world replaces the high carbon assets that currently provide essential services for the modern economy, such as power plants, steel mills, chemical plants, cars, ships, planes and swapping them for low or 0 carbon alternatives. These types of assets were designed to be in service for often 30 or 40 years, but decarbonization may require them to be replaced before the end of their typical lifespan. Moreover, to cut emissions by 50% within a decade, the next time each one of these assets is replaced, it needs to be not an incremental improvement, but a leapfrog to an entirely new technology. This dynamic creates significant stranded asset risk, but also significant opportunity as the world finances the next generation of technology.
Understanding precisely how this transition to a net zero economy is going to unfold is therefore at the center of BlackRock's sustainability efforts and differentiates us from competitors. Let me take a moment to give you an overview of our sustainable assets under management. We offer a spectrum of sustainable products that enable our clients to either avoid negative ESG exposures or advance specific sustainability objectives. We manage $159,000,000,000 in baseline screened funds that apply sustainability exclusions to companies or sectors. We manage $133,000,000,000 in ESG broad strategies, which seek to improve the overall ESG profile of a portfolio, for example, by investing in best in class companies in each sector.
We manage $49,000,000,000 of thematic strategies, which 0 in on specific environmental, social or governance themes. And we manage $13,000,000,000 in impact strategies that optimize for positive E or S outcomes alongside financial returns, such as our global renewable power franchise or our global impact equity strategy. The breadth of BlackRock's scaled investment platform also means we can invest more heavily in innovation to develop new strategies ahead of client needs. For example, we recently launched carbon transition readiness strategies and partnered with Temasek to invest in innovative decarbonization solutions. While the expansion of our dedicated sustainable product platform will increasingly meet the diverse sustainability objectives of our clients, we've also achieved 100% ESG integration across our active and advisory portfolios, such that all our active portfolio managers implement ESG considerations in their investment processes.
As sustainability becomes a critical building block in portfolios, investors need better data and analytics to help them understand how sustainability related risks and opportunities impact their portfolios. They need a combined view of both the impact of climate change on physical assets and what a transition to a net zero economy does to their portfolios over time. And while climate modeling is a sophisticated science, linking that data to investment returns is a newer project. Understanding the link between returns and the incipient transformation is newer still. Aladdin Climate seeks to put climate change in financial terms, helping investors answer questions like how could rising sea levels affect my mortgage backed security portfolio?
Or how would one oil company fair versus another in a rapid shift to low carbon policies. We link climate science and macroeconomic research to financial models, partnering with multiple data providers and drawing on the expertise of the firm and the strength of Aladdin Risk. And we integrate this data into the tools investors use to manage money today. Aladdin Climate aims to help investors get a sense of how climate can impact valuations. Here you can see 2 illustrations of the tools metrics.
Climate adjusted value or the adjusted market price at which an asset should be valued based on an embedded climate risk. A score which normalizes the climate adjusted value for a particular security and compared to a relevant peer set on a scale of 1 to 10. We are driving towards an integrated view of physical risk, transition risk and the interaction between the 2. And importantly, we are only at the beginning of this journey. As the world continues to change and the messy transition to a net zero economy unfolds, BlackRock's models and tools will evolve as well.
Sustainability is not a flash in the pan. It's the driver of a fundamental reshaping of the global economy now well underway. These changes have significant implications for both our clients and our shareholders, which is why we have taken a comprehensive approach to sustainability, embedding it across everything we do from product and portfolio construction to technology to investment stewardship. These are the steps that will position us for differentiated growth in the years to come and make BlackRock the global leader in sustainable investing. I'd like to now turn it over to Gary Schedlin, who will walk you through how we're investing to deliver shareholder value.
Thank you for joining our 2021 Virtual Investor Day. I'm Gary Shedlin, the Chief Financial Officer of BlackRock. As you've heard from our leaders today, the investment BlackRock has consistently made to build a best in class investment and technology platform centered around a fiduciary mindset where clients always come first and the collaborative and unifying 1 BlackRock culture are driving incredible momentum across our entire business. BlackRock's platform has been built over time to help clients meet their objectives, regardless of market environment or risk appetite. We've invested for years to develop industry leading franchises in high growth areas such as ETFs, private markets and technology in delivering strong active active investment performance and more recently in sustainable investing.
These investments all reflect a singular focus on helping clients construct resilient whole portfolios that leverage active index and cash strategies. BlackRock is leading the future of the asset management industry. Our scaled and diversified business model drives more consistent organic growth and stable operating cash flows across market cycles. Most importantly, it allows BlackRock to continuously invest ahead of shifting industry trends to deliver long term value for both clients and shareholders. Everything BlackRock does is rooted in our culture of focusing on the long term and anticipating the needs of our clients.
We believe in aggressively embracing change to deliver for all our stakeholders. At our 1st Investor Day in 2013, we laid out a simple framework for shareholder value creation. We committed to a roadmap that focused on the key elements of our business model that we can control, generating organic growth, realizing the benefits of scale to drive operating leverage and consistently returning capital to shareholders. Looking back over the last 5 years, we've executed well against this framework. On average, we've generated 5% organic asset growth and importantly 5% organic base fee growth, meeting our aspirational organic base fee growth target.
More recently, organic base fee growth has exceeded that target. For the trailing 12 months ended March 31, 2021, organic base fee growth was 14%, reflecting in part the current macro environment, but also the strength of our higher fee active and alternative businesses and continued momentum in the strategic segment of our iShares ETF business. We believe in the merits of scale and scale is a driver of operating leverage. Over the last 5 years, we've expanded our as adjusted operating margin by 200 basis points as we leverage the benefits of scale while simultaneously investing for future growth. Finally, we remain committed to a consistent and predictable capital management policy.
We target a 40% to 50% dividend payout ratio, which we fund from free cash flow. Over the last 5 years, our annual dividend has grown to a compound annual growth rate of 11% and after investing in our business, we have repurchased over $7,000,000,000 of stock at an average price of $4.18 per share. Assuming stable markets, we would anticipate continued execution of this framework to deliver consistent growth and operating cash flow and EPS in the future. The success of our historical investments has never been clearer. We are the industry leader in ETFs, one of the fastest growing areas of the asset management industry.
We're seeing tremendous momentum in alternatives, strong inflows into active strategies, innovation and sustainable investing and record revenues in technology services. Our ability to generate higher and more consistent organic growth in the industry and our large cap traditional peers reflects the breadth and diversification of our global investment solutions and technology platform. Our diversification in terms of product type, client type, style and geography means we are not reliant on any one strategy or market to drive our growth. As we've said before, we may not hit our 5% organic growth target every quarter or every year, but we will drive differentiated and sustainable organic growth over the long term and through market cycles. Our stable industry leading growth capabilities enable us to better manage our business for the long term, both in terms of strategic investing to drive future growth and optimizing our capital structure and to command a premium multiple relative to peers.
We continue to believe that a 5% organic base fee growth target is reasonable for the long term and across market cycles. Going forward, we believe that both ends of the investment barbell, iShares and illiquid alternatives will grow above our 5% organic base fee growth target and our active businesses will grow faster than the market. During 2020, AUM and our traditional active platform grew 5% organically compared to an industry average of 1% and our organic base fee growth was even higher at 6%. Our outperformance in active equity was even more pronounced. We grew AUM 10% organically while the overall industry saw outflows.
Over the last 5 years, there have been periods of time when growth was more concentrated in a particular category due to client demand or the market environment. The diversification of our investment platform is a distinct competitive advantage. This diversification and our ability to provide holistic whole portfolio solutions to our clients' most pressing challenges positions us well to deliver for all our stakeholders in a variety of market environments. Despite execution of the strategy that has resulted in differentiated organic growth and margin expansion over the last 5 years, there is a continued focus on changes in our effective fee rate. As we have discussed before, our fee rate is an output driven by factors we can and can't control.
We can influence organic growth by having the right products on our platform, generating durable alpha, executing our global distribution strategy and determining when to make strategic pricing investments in our business. And we have done that very well. Unfortunately, we can't control certain market centric elements that will also impact our fee rate, such as diversion equity beta and FX movements, client risk preferences and the level of interest rates which impact securities lending revenue and money market fee waivers. While we delivered a record 14% organic base fee growth rate over the last 12 months, our fee rate declined by approximately 0.6 basis points on a day count equivalent basis as the negative drag of divergent beta, dollar appreciation and the combination of money market fund fee waivers and lower securities lending revenue both associated with record low interest rates more than offset the positive benefit of mix change favoring our strongly performing higher fee active and alternatives businesses. Our focus as a management team remains on what we can control and that's on optimizing organic base fee growth in the most efficient way possible.
While we do not manage business to a specific margin target, we are always margin aware. BlackRock has consistently leveraged the benefits of scale to deliver for both clients and shareholders, while generating 5% average organic base fee growth over the last 5 years, we simultaneously expanded our as adjusted operating margin by 200 basis points. Our scaled global platform, especially in our index franchises, allows us to generate operating leverage while consistently reinvesting in our business. We will continue to make thoughtful decisions around resource allocation to ensure strategically invest in areas with the highest future long term growth potential, many of which you heard about today, including active investing, ETFs, private markets, technology, whole portfolio solutions, China and ESG. Our diversification and scale allow us to continually invest responsibly for the long term and consistently invest ahead of clients needs to create more opportunities for future growth.
Continuing to play offense, even when competitors may be forced to scale back in more difficult markets is critical for BlackRock to maintain differentiated organic growth, especially on an ever larger revenue base. We focus on managing our entire discretionary expense base, which includes G and A expense as well as the base and benefits component of our employee compensation. Our scale is a competitive advantage that benefits not only our clients through better insights, superior alpha generation and lower expense ratios, but our shareholders as well. Since 2015, as we increased AUM by some $4,000,000,000,000 and grew headcount by approximately 3,500 people, we've reduced our core G and A to revenue ratio by 130 basis points and reduced our comp to revenue ratio by 120 basis points. The decline in our comp to revenue ratio is even more pronounced if you exclude the mark to market impact of deferred compensation programs designed to better align the interests of our qualifying employees with those of our clients and shareholders.
As we continue to invest in our business, we decline as a percent of revenue as we benefit from the impact of historical investment and increased scale in our business, encourage stretch assignments among junior talent and grow our footprint in innovation centers. The result assuming stable markets should be continued upward bias in our operating margin over the long term. Our absolute level of G and A spend gets a lot of attention quarter to quarter and in recent years our total level of G and A has been impacted by non core items such as product launch costs linked to successful closed end funds, transaction costs and contingent consideration fair value adjustments related to acquisitions, FX remeasurement expense and certain one time legal items. However, the aggregate level of core G and A expense has only increased at a 3% compound annual growth rate over the last 5 years, significantly less than the overall rate of growth in our AUM. Importantly, our G and A investments have been significantly focused on technology and data spend.
Excluding technology and data, the remainder of our core G and A expense has essentially been flat over the last 5 years. As we heard from Rob Goldstein earlier, targeted investments in technology and data are not only driving revenue growth at BlackRock, but they are also making our people more productive and our business more efficient. BlackRock's capital management strategy continues to be invest first and then return excess cash to shareholders through a combination of dividends and share repurchases. Given our asset light business model, we've typically returned approximately 75% to 85% of our earnings to shareholders after investing for future growth. The differentiated growth we are seeing today is a function of the historic investments we've made.
Our priority remains to invest organically to drive outright growth and to improve our operational infrastructure. As you've heard from each of my colleagues today, we see more opportunity than ever before to invest for growth. Our differentiated investment in technology platform enables us to invest responsibly from a position of strength in our people and transformational technology and better data and our brand no matter the market environment. Today, we spend over $1,000,000,000 in technology or data related investment, whether G and A or compensation related. Continuing to scale our operational infrastructure through ongoing investment in technology and human capital will be a key component of our future success.
At times, we may also invest inorganically through outright acquisitions or strategic minority investments. However, as we've said in the past, we don't expect these to be transformational or large scale. They will be tactical and disciplined and will incrementally add to our current capabilities and growth profile. We also invest organically in our business by using our cash flow to seed new products or co invest alongside our clients. Our scale, consistent cash flow and asset light business model allows us to seed or co invest in products in larger size relative to our peers.
This provides a distinct competitive advantage by reducing time to market for critical product initiatives and allowing us to raise incrementally larger amounts of third party capital as we more effectively align interests with clients. We take a disciplined approach to these activities and are equally focused on putting new seed capital to work as we are in aggressively harvesting and redeploying that capital to optimize its impact. As an example, we seeded approximately $4,300,000,000 in products over the last 5 years, though our total economic seed portfolio only increased by $700,000,000 during that time. Today, our economic or unhedged seed portfolio totals about 1,500,000,000 dollars and we believe our seeding strategy is one of the best possible investment uses of our cash flow. We estimate our overall seed portfolio has generated an IRR of approximately 29% since 2,009.
In total, revenues attributable to our seed and co investment strategy over the past decade totaled approximately $2,300,000,000 in 2020 and that figure should grow to at least $2,500,000,000 when including potential future annual base fees on the committed capital in our illiquid alternatives business that Edwin referenced earlier. We will continue to look for new opportunities to use our scale and stable cash flow to more aggressively seed and co invest in new products over the coming years. One notable example has been our success in leading a turnaround in the closed end fund IPO market through the creation of a no load structure. By using our cash to fund product launch costs on behalf of investors, essentially akin to a synthetic seeding structure, we've been able to raise over $11,000,000,000 in active closed end funds over the last 2 years, generating a net present value to the firm of over $700,000,000 On occasion, we will make inorganic investments if we see an opportunity to accelerate growth and support our strategic initiatives. Our acquisition philosophy focuses on extending our product capabilities or distribution reach.
We think about acquisitions as a means to accelerate innovation or growth in areas targeted for investment and to inject new DNA into the organization. We will not engage in acquisitions that dilute our future organic growth and have no interest in consolidating businesses simply to cut costs. Each transaction is underwritten to generate an economic return in excess of our cost of capital as adjusted for an appropriate risk premium and is structured with earn out or retention mechanisms to maximize alignment between our current teams and those we've welcomed into the BlackRock family. In certain circumstances, control transactions are simply not possible or opportune. We will also pursue strategic minority investments to enhance durable alpha and provide advantage access to data analytics, technology and distribution.
The goal of our strategic minority investments is to generate investment value through access to the BlackRock network and or to drive incremental revenue for our products as we've done through our minority investments in Envestnet and Acorns. We understand the risks associated with inorganic investments, whether control or minority, and are ever mindful of the risk free return associated with share buybacks. Finally, we remain committed to returning excess cash flow to our shareholders through a combination of dividends and share repurchases and returned approximately $3,800,000,000 to shareholders in 2020. We continue to target a dividend payout ratio in the 40% to 50% range. Once again, we believe that the diversification of our business model leading to more consistent and stable cash flow profile supports a dividend payout ratio at the high end of our peer group.
Our total payout ratio however is an output of not an input to our capital management policy. After using our cash to grow the business and satisfying our commitment to the dividend, we will return the balance to shareholders through a consistent and predictable share repurchase program. We would not expect our current level of aggregate capital return to be impacted by potential increases to corporate tax rates. We recognize the importance of dividend income to our shareholders. BlackRock has steadily increased its dividend since its inception in 2003, never reducing it even during the global financial crisis in 2009 when we held it flat.
Over that time, our dividend per share has grown at an 18% compound annual growth rate. And we remain committed to a consistent and predictable share repurchase program. Over the last 8 years, we've repurchased over $10,000,000,000 of BlackRock shares at an average price per share of $3.79 including the repurchase from P and C of $1,100,000,000 of shares at $4.15 per share just 1 year ago. Over that time, in the aggregate, we have reduced our share count by 11% even after the issuance of BlackRock shares associated with deferred compensation programs. Additionally, since 2013 and as of April 30, our buyback program has generated a 21% unlevered annual return for our shareholders.
Our share repurchase target for 2021 remains at $300,000,000 per quarter. While we will not attempt to predict beta and don't intend to be market timers, we will remain opportunistic with respect to additional share repurchases during the year if we see attractive relative valuation opportunities arise. We've purposely invested in and built our platform to perform in any market environment. The diversification of our investment and technology platform has clearly demonstrated that. Since we first laid out our framework for shareholder value creation 8 years ago, we've hit or surpassed our 5% aspirational organic fee growth target in 6 of the last 8 years, while remaining positive in the other 2.
In addition, we have expanded our as adjusted operating margin by approximately 4.50 basis points over that time. And with the exception of 2019, where we made a strategic decision to continue investing responsibly despite a more challenging revenue capture environment created by late 2018 market volatility, we have also maintained or expanded margin in every other year. We have a proven track record of delivering for clients and stakeholders in a variety of market environments and that reflects our commitment to evolve ahead of clients' needs and continually invest for the long term. While past performance is no guarantee of future results, we remain committed to that philosophy. Organic growth is the most important driver of asset manager valuations and BlackRock remains intensely focused on optimizing our organic growth in the most efficient way possible.
We've spent today talking about what differentiates BlackRock and positions us to continue to meet client needs and adapt to a rapidly changing ecosystem. We are a globally integrated investment management and technology business with the industry's most comprehensive array of products and portfolio construction capabilities and unparalleled distribution reach. Our unique culture drives emotional ownership at all levels and enables us to attract and retain the most talented professionals in the industry. The investments we've consistently made to support growth have enabled us to consistently industry trends, doubling down our investments in Aladdin, iShares and private markets, making significant advancements in sustainability and delivering strong active investment performance. The combination of our comprehensive and integrated investment platform with global and local distribution capabilities has driven 5% average organic base fee growth over the last 5 years.
And as you've heard today, our platform has never been better positioned to continue delivering differentiated organic base fee growth. Our global scale and commitment to technology has enabled us to expand our as adjusted operating margin by 200 basis points over the last 5 years and then stable markets should have continued upside. And the consistency of these financial results has allowed us to manage our cash flow more effectively and efficiently underlying a capital management program that has increased our dividend by 11% and reduced our share count by 8% over the same time period. We remain committed to consistently returning excess cash to you, our shareholders. Our diverse investment platform, leading technology and unmatched global scale also allows us to continue investing for the future, whether in good markets or more challenging ones, when others may be forced to pull back.
We have a strong and resilient platform. We have a well defined growth strategy that can be efficiently funded. We have a strong purpose embraced by our talented employees and we have an exceptionally dedicated team of leaders who are highly qualified and motivated to drive BlackRock to its next phase of growth. That combination positions us well to continue delivering long term shareholder value in the future. Thank you for listening.
And now I'll pass it over to Larry for closing remarks.
Thank you, Gary. Hi, everyone. We are here live from our office in New York for this next portion of our day. It was important to me that our leaders join together in person today. Everything you've heard from our business leaders today reflect how we lead by our commitment to listen to our clients and to evolve to meet their needs.
This mindset has guided the deliberate investments we have made to build a resilient asset management and technology platform that serves clients over the long term. It is also what has consistently positioned us to be ahead of our industry. Time and time again, BlackRock has taken bold actions that challenges our self and challenges the status quo. And our ability to adapt, our ability to evolve and grow has generated a total return of more than 9,000 percent for our shareholders since our IPO in 1999, which is well in excess of broader equity markets. Asset managers were historically monoline businesses and we at BlackRock too was founded solely as an institutional bond manager.
But we realized that to truly serve our clients, we needed to expand beyond fixed income because clients were investing across all asset classes in their portfolios to meet their needs. That understanding and a cultural shift drove our acquisition of Merrill Lynch Investment Managers in 2006, which enabled us to become a more full service investment firm, adding equity investments to our platform and reaching wealth clients internationally. Not only did our clients invest across asset classes, but across investment styles. By talking to our clients to understand the context of their whole portfolios, we saw an opportunity to offer both active and index investment strategies to better serve their needs. At the time, the narrative was one of active versus index and it was difficult for many people to fathom how an asset manager could effectively provide both strategies and importantly from a cultural perspective.
But we had a strong conviction in the value proposition of ETFs and the ability of ETFs at Active to complement one another in building better portfolios for all our clients worldwide. Continuous investments since our acquisition of BGI has fueled iShares growth from $385,000,000,000 of assets to 2,009 excuse me, in 2,009 to more than $3,000,000,000,000 today. And more importantly, all types of investors, even active managers are using ETFs as tools to effectively manage portfolios and to achieve better outcomes. 3 decades ago, we built Aladdin to process information and to manage risk for the assets that we were managing. 10 years later, we began selling Aladdin and today we generate more than $1,000,000,000 in direct revenues from this technology.
The evolution of Aladdin has been remarkable and is only accelerating from launching a wealth management offering that is now used by more than 38,000 wealth professionals in 13 countries. To developing and expanding Aladdin provider, which connects organizations in the asset management ecosystem together more seamlessly
and to
the build out of Aladdin Climate, which will help clients manage the impact of a changing climate on their portfolios. More than 5 years ago, we began investing significantly in our alternative platform with a focus on private markets investments like infrastructure. Today, we are leading in an alternative player managing over $200,000,000,000 for clients and our industry is seeing an accelerating shift towards private market assets. BlackRock is gaining momentum as we scale our offerings, our differentiating sourcing capabilities and the integration of data and technology to manage private and public market assets in a whole portfolio view using Aladdin and eFront. When we announced our acquisition in BGI in 2,009, our combined AUM was $2,700,000,000,000 which at that time represented 1.5% of global financial assets.
Over the last 12 years, our AUM has grown to $9,000,000,000,000 and this only represents an approximately 2% share of the global capital markets. Our size has nothing to do with our balance sheet. It is entirely our clients' assets. As a $9,000,000,000,000 asset manager, we are able to provide more benefits and scale to our clients than ever before and we still have a significant room to grow. Looking ahead, BlackRock's strategy and business investments for the future remains guided by the same client focused mindset that brought us here today.
We continue to ask ourselves, how do we help investors achieve a better outcome over the long term? As Rob Goldstein and Mark Weidman discussed, clients will benefit from scaled partners who have a deeper understanding of the global picture and a platform with all the tools and all the technology to put it to work for them. And we are continuously investing to ensure that we stay in front of our clients' needs. In iShares, Salim Ramji and his team are investing in our scale and ability to handle complexities across our ETF platform and connect it with the rest of the ETF and indexing ecosystem. Edwin Conway and our alternatives team are investing to scale our credit and infrastructure platforms and doubling down on our growth accelerators in wealth, in Asia and in sustainability.
For our active platform, Rich Cashel is focused on investments in data analysis capabilities such as analytics for Chinese bonds and equities and developing additional capabilities to source private assets, particularly outside the United States. Sudhir Nair and team are evolving and engineering Aladdin for new levels of scale. We are investing in a better data access and integration and working with clients as they migrate to the cloud, increasing end to end connectivity across the entire ecosystem and launching new capabilities such as Aladdin Climate. Martin Small, Stephen Cohen and Rachel Lord are bringing all our benefits to our global platform to clients around the world, including in areas like China by deepening our local infrastructure to build broader client partnerships. We are investing in people who speak every language.
We are investing in people who understand local markets and regulations that have insight into how the changing world intersects with their needs and their goals. Mark McComb and his team are investing to build a more intuitive, resilient retirement solutions, working with governments and the private sector across dozens of countries to provide our retirement system expertise, insights, products and services. Finally, BlackRock's commitment to evolve to meet our clients' needs is nowhere no more evident than its sustainability as we adapt to the fundamental restructuring that the energy transition is driving across investing and the real economy. Paul Bodner and many teams across BlackRock are investing in investment solutions in data and technology capabilities, so we can help our clients address the impact of sustainability and sustainability factors on their investments to capture significant client demand for sustainable solutions. While I can't tell you exactly what BlackRock will look like 10 years from now, I can tell you that as a leadership team, we will continue to broaden our perspective.
We will continue to challenge ourselves. And in doing so, we will challenge the status quo and make our platform and technology better for more clients. We will continue to invest in our clients. We will continue to invest in our employees and the communities where we work and our shareholders will be the biggest beneficiary of this approach. We are looking forward to you joining us through this next leg of our growth.
And I hope today's session has better provided you with a better understanding of the areas powering BlackRock today and how the scale of our platform is delivering for our clients and how BlackRock is better positioned than any firm to win a greater share of clients' assets and our platform and technology are in the best position they've ever been in our 33 year history. I am so proud of what we have achieved, but it isn't our platform alone. It is truly a testament to the leadership, to our culture and the talent we have across the entire firm of BlackRock. Today, we highlighted only a few of our members of our global leadership team. We take a long term approach to developing our leaders and BlackRock's Board of Directors and I have no higher priority than ensuring we are developing the next generational leaders for this company.
I am not planning to leave anytime soon, but I have always said that my goal is to ensure that when Rob Capito and other co founders and I have moved on, the firm is in better hands than it is today and I am more confident than ever that we will achieve that goal. We are where we are today because of our relentless commitment to our purpose, to be using our voice and to our understanding where the future is headed. Our focus on our clients, our focus on our employees and the communities where we operate have allowed us to grow and to build the momentum that U. S. Shareholders have enjoyed and I believe how you as shareholders will see what you will see in the future.
And we're going to continue to invest, so we can deliver long term value for all of our stakeholders, including you, our shareholders, in the years decades ahead. Thank you for joining us today and being part of BlackRock's past, our present and our future. I'd like now to pass it back to Sam for questions. All of our presenters are here to take questions today, and I welcome questions from any shareholder and our sell side research analysts. Thank you very much.
Thank you, Larry. As Larry mentioned, all of our presenters are here with us today and we encourage you to ask questions to the group via the webcast platform or by emailing invrelblackrock.com. We'll start with live questions from the research analysts covering BlackRock, who are joining us on audio today. Operator, I'll turn it over to you to announce our first question.
Thank you, Sam. As a reminder to all call participants, please mute or turn off your webcast to avoid any feedback. Your first question comes from Craig Siegenthaler from Credit Suisse. Your line is now live. Go ahead, please.
Good morning, everyone, and congrats on the successful Investor Day. Hi, Craig. I have a 2 parter on your
I have a 2 parter on
your illiquid alts business.
First, what do you see as the
major products today in illiquid alts sorry, product gaps in illiquid alts, including on the perpetual vehicle segments? And part 2, can you update us on what private asset investing capabilities you're currently offering in both Asia and in growth equities?
That's a great question. I will actually pass that question
I would say the illiquitous part of the business today where we have gaps, obviously, we've worked on this for 3 decades. So as you look across the spectrum of what we do to serve our clients, it's not just only in private equity, in both the solutions format and also direct, but it spans private credit, infrastructure equity and debt, real estate equity and debt. And our private capabilities are also in credit and all the way then through to leverage finance. The reality is there are very few gaps today. And the purpose behind that build out is like how do we address the client's evolving needs.
And as you've probably seen already within the institutional space, we're seeing 80 plus percent of those clients telling us they actually need more of these assets. I think the thing that you're going to see from us is a continuation of an evolution in product structuring and how we could target specific exposures, particularly as this asset class and set of asset classes evolve. So some of the old traditional structures, more global in nature, those blind pool vehicles, clients are looking for more direct control. So I will say in all aspects of what we're doing, continue to see more product innovation within what already exists. And particularly with regard to APAC, we're seeing both wealth and institutional opportunity.
1, to source assets for improved performance, but also importantly, there are very significant capital pools on the institutional side that are looking access for the rest of the world. And really, as you probably know, with these clients, they're particularly looking for a brand and a manager can provide access in many ways because the difficulty of being far away for some of these markets they want to access is having somebody can be local for them. So I think this is particularly well placed in where we play. With regard to growth equities particularly, we've just launched a capability that is directed towards more late stage venture, early stage growth. Appetite, we believe, is very strong there.
That's just coming to market. You have heard earlier, we've just launched decarbonization partners, really in combination with Temasek, where we're looking to take advantage of this decarbonization opportunity set. That's a global one. It's a new product suite. It's really private equity, but early stage investing in many respects.
But that's where we see the demand absolutely going. So expect product innovation within the current suite. We really don't see major gaps today.
Awesome. Thanks, Edwin. And I think that's a very different place than we were even 5 years ago at this organization. Operator, let's have the next question.
Yes, ma'am. Your next question will come from the line of Alex Blostein from Goldman Sachs. Your line is now live. Go ahead, please.
Great. Good morning, everybody, and congrats on the day as well. So, I was hoping to build a discussion around private markets, but really maybe focusing on the wealth management part of the story. Large opportunities that you've outlined. Clearly there are many other competitors including the pure play alts that are looking to capitalize on this.
So can you expand on your initiatives in bringing more private markets alts into the wealth channel, I guess in the U. S. And EMEA, what products and strategies and really distribution channels you expect to sort of lead with? And then particularly curious about your thoughts around perpetual raising products such as private REITs or maybe private BDCs. And I guess lastly, whether or not these initiatives are included in your $100,000,000,000 3 year ALTS target?
Yes. Awesome multipart question that I think we'll pass over to Martin Small, who's on the line today.
Great. Good morning, everybody. Thanks for the question. So let me offer 2 things that think we're doing here in the U. S.
Wealth management market to grow alternatives in private markets. The first thing is we have the industry leading sales team, which is rich with portfolio consultants and also has a tremendous amount of digital engagement with advisors to the advisor center. And we are integrating in a big way alternatives in private markets into every way we engage with a financial advisor. Historically, our engagement with advisors has largely been across our public markets franchises, but we're having a lot of engagement and are increasing engagement and activity significantly on everything related to alternatives and private markets. The second thing is, we have a really unique position in the way that we can serve wealth managers in the U.
S. And I think this is true all across the world for us is we have real breadth in wrappers in the way that we can deliver alternatives in private markets. We have a fast and growing usually at the top of the league tables 40 Act Liquid Alts set of offerings were at the top of the league tables and 40 Act Liquid Alts in the Q1 of this year. We've made significant investments to grow our accredited investor offerings through interval and tender funds in both private equity, private credit and then also obviously our closed end fund franchise has been a big way for us to fuse together public and private markets that offer ease of access and private markets to the emerging mass applet. And then we have all of the capabilities of our institutional liquids business to bring to the wealth channels as well as obviously all the leverage we get from our strategic relationship with I Capital and others to distribute that in a way.
So we're going to continue to invest heavily in sales, distribution, marketing, also education as well as digital. And we're also going to be expanding our product offerings in exactly the areas that you touched on in the question over the course of the near and intermediate
term. Thanks so much, Martin. I'd actually love to get Stephen Cohen's perspective on how we're engaging wealth clients in EMEA with alternatives products as well.
Absolutely. Thanks, Dan. Very similar to what Martin said, I think we are really seeing what is has been a relatively nascent part of the wealth market here in EMEA. But now with the LTIF wrapper, which is a big development over the last couple of years, something that we have really, really led. That first in private equity, now in infrastructure, we're really seeing take up by many of our wealth management clients.
We're also seeing a lot of interest in solutions. They're really building bespoke solutions with our wealth management partners to be distributed. So I think the product evolution and innovation continues and we have more to do in that space. And then the other piece building on what Martin said is actually how do we work with our partners to really increase the access of the wealth industry to alternatives, which is something that has lagged. But I think there's a lot of opportunity there to deal with some of the operational challenges.
So very similar story to the U. S. I think that wealth in alternative or alternatives in wealth will be one of the big growth areas for us in the region over the next couple of years.
Great. Thanks, Stephen. Operator, let's do the next question.
Thank you. Your next question comes from Michael Cyprys from Morgan Stanley. Your line is now live. Go ahead, please.
Hey, good morning. Thanks for the presentation today with all the details. Really appreciate it. Just wanted to ask a question on the Aladdin migration to Microsoft Azure. I was just hoping you could elaborate a bit on that.
How are you going about that migration? What exactly does that entail? I think can you talk about some of the benefits that that could bring just in terms of more expense efficiency in the business, but also unlocking greater growth potential for Aladdin?
Sure. This is something we're really excited about for BlackRock and our clients. And I think Sudhir Nair will take the answer to that question.
Hi, great. Thanks, Mike. Appreciate the question. So overall, the migration of Aladdin's technical infrastructure to Microsoft Azure is well underway and very much on track. And at this point, every new Aladdin client environment is being built in the Azure environment.
So we're no longer building out those environments in any of our BlackRock owned and operated run data centers. Our existing clients are well through the migrations. We're making great progress. It's going very smoothly. By the end of 2021, we expect to have about 50% of the existing Aladdin client environments migrated over with the remainder of which following through 2022, but very much on track with the multi year timeline that we laid out.
Consistent with what we said at the beginning when we announced this decision to move to Microsoft, the rationale was less around cost and cost reduction. It was exactly what you said, it was all about unlocking growth and accelerating innovation by taking advantage of a partnership with Microsoft and leveraging their global scale and global computing power. I think probably the 2 best examples I could highlight of things we've seen year to date, one is just global. As our Aladdin business, as our technology business has gotten increasingly global, we're increasingly sensitized to local jurisdictional data requirements and needs of our clients. And by leveraging the Microsoft network of data centers and their Azure cloud computing capabilities, we're able to be much more local and meet the specific needs of our data requirements for our clients as we build out and host new Aladdin environments, which has been incredibly important as we think about global expansion.
I talked about some of the key growth areas being Europe and Asia, where this is increasingly important. And I think the second big area that I can point to is just the collaboration, the partnership that we talked about that we announced earlier this year with Snowflake around a new product innovation called the Aladdin Data Cloud. I talked about in my presentation how as more and more of our clients in our industry move towards the cloud, the ability to bring together all of their data, their non Aladdin data, their Aladdin investment data, but to really unlock that for the benefit of the entire investment process is critical. All of that has been accelerated and really enabled through this through our decision to and our move from our proprietary on-site data centers to the Microsoft Azure Cloud.
Thanks, Sudhir. And thanks, Mike, for that question. Operator, let's have the next question.
Thank you. Your next question comes from Bill Katz from Citigroup. Your line is now live. Go ahead, please.
Okay. Thank you very much for taking the question and appreciate the comprehensive update today as well. Maybe a bit of a narrow question for Mark McCombs. Just recently one of your major competitors in the retirement market, significantly cut pricing on the target based fund footprint. Just sort of wondering, how does BlackRock's LifePath portfolio stack up on fees?
And should we be worried about some kind of race to 0 here for the segment at large? And appreciate you have a global footprint, but sort of curious your thoughts maybe the U. S. And more broadly?
You're taking my job, Bill. Mark McCarthy, over to you.
Yes. Thanks, Bill. I wouldn't say it's a race to the bottom. I mean, workplace plans are obviously pretty finely priced and that's appropriate. It's kind of why we put the emphasis on innovation.
And I would say it's the reality that investment performance matters. The reason we've been gaining market share is because we've had strong investment performance on our target date funds. Of course, that's only part of our over $1,000,000,000,000 that we manage in DC Assets more broadly. And obviously, we have a heavy emphasis on index funds, as you can imagine. So I think we obviously watch price action very carefully, but it really is just one component of how plan sponsors make decisions on who to go with.
And I think based on the performance we've had over the past 12 months and what we see in the pipeline, I feel pretty confident that we're holding the pricing and it's not really a race to the bottom. But obviously, scale matters, how we deliver it matters. And then as I talked about, innovation is critical.
Great. Thanks, Mark. Operator, next question.
Thank you. Your next question will come from Brian Biddle from Deutsche Bank. Your line is now live. Go ahead, please.
Great. Thanks for taking my question. Also, I just want to echo a lot of great themes today. Maybe if I could just focus on sustainable investing, it definitely seems like one of the strongest growth opportunities across all of the themes. Just the path going from the $353,000,000,000 to $1,000,000,000,000 by 2,030.
Maybe it's I guess a 2 parter for maybe both Larry and Paul Wagner. The growth drivers within the different segments, you did outline an AUM split pretty nicely on Slide 117. Curious to see of those different categories, what you see as the best opportunity to get to that $1,000,000,000,000 and how alternatives will play in that? And also just perspective, Larry, if you think the U. S.
Is going to catch up to sort of Europe in terms of the magnitude of net flows, the growth rates are stronger in the U. S, but we're still seeing about 5 times the level of net inflows in Europe versus the U. S. In sustainable investments. So, just some perspective on that as well.
Thanks.
Sure. I certainly think Paul can speak to that question in its entirety, but we'll also look to hear from Larry as well. Thanks, Paul.
Yes. Thanks for the question. So, as sustainable investing moves from niche to mainstream, we're certainly seeing accelerated demand across client types, asset classes, vehicles and regions. And we've been focused on building a comprehensive suite of sustainable products across asset classes and investment styles from active to index to cash. And as you say, while Europe has represented the strongest market, the U.
S. Is catching up. So in Europe, we did a survey in 2020, which showed that 64% of clients in the Europe region saw sustainability as their number one priority or very important versus 40% in the United States. On the other hand, while we saw growth of 61% of organic asset growth in EMEA on sustainable assets, that was 86% in the Americas, reflecting the fact that the U. S.
Is catching up. So, BlackRock overall, of course, has outperformed in terms of capturing market share of these flows versus our competitors. Industry flows grew at an organic rate of 27%, BlackRock at 64% last year. And our focus on the future building on our extremely successful track record of building sustainable ETFs will be in expanding our active suite. So Larry, would you like to add anything?
Thank you, Paul. As I have written about the tectonic shift in investment strategies and investment allocation, we are at the beginning of this. The difficulty we have in so many categories is there is not enough to invest yet. And in some of the categories, there is huge flows of money going into. Our key is to be identifying new opportunities.
And this is why I do believe, as you raised the question, I do believe there are going to be huge opportunities on the illiquid side too. And that's going to be investing in new technologies, in new science as we try to really move society and the world to a net 0. I also do believe that as we as governments worldwide focus on the need to get to net 0 and the need for all parts of the world to participate, there is going to be great needs for private capital in the emerging world too. And maybe that's going to be done in conjunction with the multilateral organizations. We are very excited about the partnership we have with France and Germany in terms of our sustainable fund there.
We see huge opportunities in our decarbonization fund that is with Temasek. So this is just the beginning. We're seeing huge flows. I believe the huge flows are going to accelerate. In my conversations with our clients and Mark's conversations with clients in the United States, we are these conversations about sustainability are becoming just as dominant in the scope of the conversations as they are in Europe.
The big change probably in 2021 is the conversations we're having in Asia too. So what is happening now, we are having these type of conversations worldwide and all companies worldwide are participating. And let me be clear, as an asset manager, we're at the nexus right now. We're at the nexus between the owners of capital and the investments we make in the companies we invest in. We are working with all the asset owners worldwide and there is historically been a difference between the owners of capital in the U.
S. And the owner of capital. In the United States, there is a greater need for understanding of how they should look at it in a portfolio setting. And until the Department of Labor changes their rules on how we should invest, we have to make sure that we are that climate risk is investment risk and we have to document that. And that is why as we think about it, why it is so important for Aladdin Climate to be the analytical foundation for our investments on behalf of our asset owners.
And I do believe as Aladdin becomes the technology for all investors, I believe Aladdin will become the technology for investors focusing on climate risk. And this is why it's so integrated in our thought process. This is not just about creating products, it's about educating the owners of capital. And our corporate stewardship team is about educating the corporations and how they should move forward. And so we are playing a very important role.
But the key that links all this together is the role we play in trying to deliver data and analytics to quantify these investment strategies, but also ensure that these investment strategies are maximizing return for our clients worldwide. And I think no firm in the world is doing a better job than BlackRock today.
Thank you, Larry. Operator, let's have our next question.
Thank you. Your next question comes from Ken Worthington from JPMorgan. Your line is now live. Go ahead please.
Hi. Thank you for presenting today. I wanted to follow-up on LifePath Paychex. Firms have tried and failed for years to solve the de accumulation problem. So maybe first, how is BlackRock getting de accumulation right where others, including record keepers have failed for years, if not decades?
And then, are there applications to paychecks to areas like the U. S. IRA market as well as to retirement plans outside the U. S. Where de accumulation may also have potential?
And then lastly, what is the revenue model here? Does the Paycheck initiative drive revenue directly? Or is the business case really about making the LifePath products more attractive to plant sponsors?
Great questions, Ken. Thank you for those. I'll first pass it over to Mark McComb and then we'll hear from Larry on this topic as well.
Yes. Look, it's a great question and it's a long answer. It's been a quite incredible 2 year journey to essentially build this accumulation product. It's really about embedding an annuity into the target date fund. That requires a huge heavy lift.
As you know, the DC plan is a very sort of well structured and governed plan. So we needed to think about it through the lens of kind of providing optionality as those people who move towards retirement start to build essentially units of future secure income. So you sort of almost think of it as a separate asset class. As I mentioned in my presentation, we had to work with the insurance industry because obviously they could provide that guaranteed income. So we've spent 2 years and obviously in the middle of it, we had a massive pandemic as we all know, which meant that HR departments who actually have a very important role to play in the development of this, were focused on other issues.
So that kind of put a bit of a hiatus onto it. We were thrilled that we have been able to build an extremely strong pipeline of client interest. And we have now secured our first two clients in this area and that we are actually full steam ahead working with the record keepers, with the investment consultants, with our technology partners in order to actually build and deliver this. So I think the right answer on your question about the revenue model, here's the way that we think about it. If we can get more people to engage in building long term retirement plans earlier in their careers, We believe that in the end, that's going to build our position in the retirement space.
It's going to build our market share based on the innovation of this product. There is genuinely a moat around this. We believe that it is unique in the industry. We've seen every other income solution out there and this they pale into insignificance against this particular solution. So it is truly innovative for the firm.
As I say, it's been a huge heavy lift for all of us. And to your final question, we believe that this will have applicability overseas, but we want it to be in our home market first because that's where we really understand the ecosystem and how to actually embed this in the solution. So, we're super excited about it. It's a great initiative. Larry?
Ken, great question. We talk about retirement. I write about retirement a lot. It is a global silent crisis. I think what we do here in the States in the first phase of LifePath Paycheck will be applicable worldwide.
I think one of the big foundations around China is their retirement crisis and the opportunities to create a 3rd pillar retirement market. And so the applicability of this type of product will be large. But back to LightPath Paycheck in the United States, I think it is not just innovative, it is going to be transforming the decumulation component of our markets. I've had many conversations with many and they believe this will lead to incredible changes in the retirement market. And as Mark said, we have won our first two clients.
We will announce that shortly. But we also have many, many other clients focused on it. We have consultants improving it. And but it has taken longer than we thought, but we are this is going to be a major component of our forward growth in terms of our positioning and staying in front of the needs of our clients. I do believe this is a great example how we have tried to solve a long term problem and trying to come up with answers to achieve this long term problem.
As you know Ken, having a lump sum payment at retirement does not serve the participant. If we could create a mechanism in which we could create a payment similar to a salary check And they understand what that payment is. And through our models, we could show how much are they contributing, what will the payment be at the end. And they can see if that's too small and they may have to contribute more, but it informs, it educates, it is a great vehicle for long term financial literacy, understanding the issues of compounding and all that. And the most important thing, it creates incredible connection between the employee and their company.
And I want to underscore that. This is not an example where an employee leaves a company and they're just left. This creates that long termism with the participant and their company they worked at. And I think as we focus on stakeholder capitalism, this is a great vehicle to create that deeper emotional connectivity and financial connectivity between the employer and the employee. And that's what we try to seek and solve and I think we did.
Very comprehensive answer, Larry. Operator, let's have our next question.
Thank you. Your next question comes from Robert Lee from KBW. Your line is now live. Go ahead please.
Great. Thank you. Good morning everyone. Thanks for the comprehensive update this morning. I really appreciate it.
Obviously, clearly ETF business is a huge growth driver. But I'm just curious, you mentioned there, for example, having 2 dozen APs providing capacity across the globe. But given the growth of the business, the growth prospects of the business, I mean, I'm not sure at least to my mind, I'm not sure if 2 doesn't sound like a lot, but is there any capacity constraints that you see on ETF growth from related to EP capacity? I mean, is the demand outstripping the supply, so to speak?
Sure. Salim can take that question on authorized participants.
Sure. Thanks, Robin, for the question. I think you're picking up on a kind of obscure reference we put at the end of our ETF presentation around the number of APs that we have for market maker efficiency. It's actually something we're really proud of. And the critical measure to our minds is not just the number of APs, but the number of active APs, which we define as people who APs who have created or redeemed one of our ETFs in the past year.
And so the short answer is with 2 dozen more than 2 dozen active APs, we feel very good about that capacity. The long answer is in a paper that we published just a few months ago with the catchy title of Policy Spotlight Authorized Participants that we can refer you to, which gets into much more detail about the question that he answered. But maybe let me just give you a couple of examples, which illustrate this in the context of the bond market. The first one is, if you go back to last year and in moments of particular stress in the bond market, where our ETFs became the place in which actionable markets were made, we saw more active APs rather than less relative to all other periods beforehand. And I think that confounded the skeptics, but it really gave us another proof point about the resilience of active APs and the ability of active APs to step in.
But I think the second example is really the broader point. And the broader point is the embrace of portfolio trading by bond dealers in a much more significant way today than even was the case a few years ago. And that's giving them the incentive to really be much bigger participants in the ETF trading, in people who have expertise in ETFs and investments in the ETF ecosystem itself. And we think it's that incentive and that embrace by bond dealers, which is creating their increased willingness to play roles as being active APs. So, we're very vigilant about it.
The paper goes into a great deal of detail about that. But the short answer is we feel good about our capacity of active APs and we think it's a real differentiator for iShares and for BlackRock.
Great. Thank you, Salim. Operator, I think we have one more question on the line. Let's turn it over to that individual.
Thank you. Your next question comes from Dan Fannon from Jefferies. Your line is now live. Go ahead, please.
Thank you. I was hoping you could expand upon the China opportunity, which obviously is significant over time as that market opens up and you have a JV as well as a fund management company. Hoping you could talk about maybe some of the milestones and how we can think about success and what do you see as the biggest contributor to growth over the next kind of 1 to 2 years?
Yes, that's a great question. For Rachel Lord joining us from APAC at an unfriendly APAC time, but we appreciate you being on.
Yes. I was kind of hoping you were going to ask me a question after midnight actually, Sam, because then I could have talked. It's very it is long term in nature. We are building to businesses from scratch, which are going very well. Larry referred earlier to how we're hiring people who speak local languages, understand the local community.
But you also heard from Mark talk about retirement, which is to adapt in order to be able to meet the needs of an aging society. I think 200,000,000 people will move into retirement over the next 15 years. So these are huge numbers. And we have to build out the system that will enable those communities to have a better experience through retirement through saving now for the future. So second thing to bear in mind on China, which we didn't really talk about much, but it's like what is happening in this opening up of the markets.
It is a very considered approach to modernization in order to create financial resilience and stability within the Chinese market. And that opening up means that the if you like, the savings market in China has to evolve into an investing market. And when you look at just the size of the savings market, it's north of $9,000,000,000,000 Most of that today is invested in relatively basic products that are more short term in nature. They're not really investing products. So the opportunity for us is how do we help provide investment solutions to clients, how do we help structure the help with the retirement market.
I can't tell you today what the right milestone is. I'm sorry, I know you want to hear that so that you can put it into your financial models. This is a journey over a few years. But it's quite clear that the opportunity onshore in China to participate in this opening up is very, very large for the entire industry. And we do expect to take a market leading position over the course of the next decade.
And then, of course, what comes with that is the opening up of the financial markets in China creates opportunities for international investors. And there, we already have some milestones. And so I think I said on the video, which we recorded a few days ago, that we'd already moved our ETF from 0 18 months ago to €1,000,000,000 in September of last year. We just crossed €10,000,000,000 a couple of weeks ago. Well, today, we just crossed £11,000,000,000 I checked tonight.
And we've added £1,000,000,000 in a few days. So the appetite and the need for international investors to deploy capital sensibly and into the Chinese markets is huge. And so that's one way you can actually look at today's milestones. And that's where I would look at the growth rates in Chinese equities, Chinese bonds for international holders. I'll pause there because I know we're out of time.
Thanks, Rachel. I think, operator, we'll take one more question from the line.
Thank you. Your next question comes from Brennan Hawken from UBS. Your line is now live. Go ahead, please.
Thanks for taking my questions and squeezing me in. I really appreciate it. There's been a lot of talk about the SMA market. It's been resonating a lot, especially with potential for tax changes. I'm curious about Aperio and how you're thinking about the positioning of Aperio in the channel.
It's my understanding the firm's been more focused on the RIA side in the past. Is that right? And how are you thinking about pivoting that business and going after larger wealth management firms and what do you need to do to achieve that? Thanks a lot.
Great. Martin, that's another one for you.
Perfect. Thanks Brandon for the question. We closed the acquisition of Aperio in February of 2021. We brought 100 new talented employees to the BlackRock family, incredible capabilities at Aperio in tax managed SMAs and SMA technology and values aligned investing and ESG. And as you mentioned, really deep long term relationships in ultra high net worth multifamily office and the RIA segment.
And so far that's really, really been terrific. The combination is proceeding really well. As I mentioned in my remarks, we've built a $6,000,000,000 pipeline just since we closed the transaction back in February. And one of the key ideas that we had in this acquisition was bringing Appirio to many of the traditional strongholds and great relationships we have across wirehouses and independent broker dealers. So that is very much in flight.
Part of that is integration, research, product approval, training up our folks to be able to speak about it and all that work is underway and proceeding at pace. Things are rooting really nicely. Flows have been good so far and we're of course really focused on making sure that all of the existing Aperio clients have a seamless experience as Aperio integrates into BlackRock. And the last thing I'll say is just against the backdrop of what will inevitably be higher taxes all around, putting taxes at the center of the way financial advisors build portfolios for their clients across all tiers of wealth that is really integral to our strategy. And some of the crown jewels in this combination aren't just the technology and asset, it's the people, the know how and what I'll say are the real tax acumen that we are going to scale not just across SMAs, but across the very prospect of how somebody who lives in Akron, Ohio should build a portfolio is super different than somebody who lives in Portland, Maine.
So we're going to be super focused on that and I think it's going to be a great value for our clients and a great experience for our people.
Fantastic. Thank you, Martin. Thank you all for all of your questions. We've actually reached our allotted time for those for questions. But for those questions that we were unable to address during this session, I know we received some in the portal on sustainable investing and China and the regulatory environment.
If you have any additional questions as well, please reach out to the Investor Relations team and we will get back to you if you asked a question and we were unable to answer it today. We hope today's presentations have helped you gain a deeper understanding of how we're positioned to drive BlackRock's future growth. On behalf of the entire BlackRock community, thank you for your interest and support. We hope to continue to grow together with you into the future. Have a great day, everyone.
Thank you.