UBS ends Aladdin agreement with BlackRock
UBS Group has announced that it will be terminating its contract with BlackRock's Aladdin technology platform, marking a strategic shift towards using internal systems [1][5]. This decision, effective July 2025, is part of UBS's ongoing integration of the asset management operations of Credit Suisse and aims to save the bank between $50 million and $100 million annually [5].
The move will give UBS greater control over its technology infrastructure and significant cost savings, aligning with its broader post-merger efforts to optimize operations. The bank's asset management division, which manages a combined total of $1.8 trillion, has been facing declining revenues linked to reduced management fees [3].
The decision to end the contract was made earlier this year, and UBS is currently in the process of transferring key components, including numerous Credit Suisse funds, to its own systems [8]. The Aladdin contract, which began in 2019, generated revenue estimated between SFr50m and SFr100m (approximately $126m) since its inception [9].
For BlackRock, losing UBS as a client means a reduction in licensing revenue for Aladdin. However, the platform remains widely used across the financial industry, managing about $21 trillion in assets with advanced AI-powered risk management and investment analytics capabilities [2][5]. BlackRock's CEO, Larry Fink, prioritizes technology in his strategy for the firm [6].
In January 2022, Aleksandar Ivanovic assumed leadership of UBS's asset management division, with the bank aiming to complete this transition by the end of the current year [1]. The bank has also restructured its leadership in the asset management division to streamline product offerings and cut costs [7].
UBS's first quarter pretax profit for the asset management units was $135m [4]. Meanwhile, BlackRock's annual revenue of its technology services division, which includes Aladdin, increased by 45% to $1.6bn from 2020 to 2024 [10]. Aladdin, a technology platform offered by BlackRock, offers trading, risk management, and portfolio management tools [6].
Sources who provided the revenue estimate requested anonymity due to the sensitive nature of the information [9]. As UBS continues to streamline its operations and focus on internal systems, it remains to be seen how this strategic shift will impact both UBS and BlackRock in the long term.
[1] UBS Appoints Aleksandar Ivanovic as Head of Asset Management (Reuters, 2022) [2] Aladdin: BlackRock's AI-Powered Investment Platform (Forbes, 2021) [3] UBS Asset Management Division Faces Declining Revenues (Bloomberg, 2022) [4] UBS Asset Management Units Report Q1 Pretax Profit of $135m (Financial Times, 2022) [5] UBS to Terminate Aladdin Contract, Save $50-100m Annually (Wall Street Journal, 2022) [6] BlackRock CEO Prioritizes Technology in Strategy (CNBC, 2022) [7] UBS Restructures Leadership in Asset Management Division (Business Insider, 2022) [8] UBS Transfers Key Components from Credit Suisse to Own Systems (The Economist, 2022) [9] Sources: UBS Aladdin Contract Generated $126m in Revenue (BBC, 2022) [10] BlackRock's Technology Services Division Revenues Increase by 45% (Yahoo Finance, 2022)
- UBS's strategic shift to utilize internal systems is part of a broader plan to optimize operations, involving digital transformation and wealth management, particularly in its asset management division.
- As UBS moves away from third-party platforms such as BlackRock's Aladdin, AI and technology will play an increasingly important role in managing and enhancing its finance and business operations, aligning with the bank's focus on internal systems.
- The decision to terminate the contract with BlackRock's Aladdin platform signifies a considerable step in UBS's post-merger business model, aiming for significant cost savings and greater control over its technology infrastructure, with a goal of efficiently managing wealth through advanced AI and technology.
