BlackRock takes stake in European robo-adviser

Asset manager pours millions into digital distribution

BlackRock has taken a significant minority stake in robo-adviser Scalable Capital, the giant asset manager’s fifth foray into digital wealth management.

As previously revealed by Fund Strategy‘s sister title Money Marketing, the European online wealth manager, which launched in the UK a year ago, has been seeking deals to provide financial institutions with its platform and money management services.

BlackRock has poured €30m (£26m) into Scalable Capital, which now has total funding reaching total funding to €41m.

As of today, Scalable Capital, which claims to be the second largest digital wealth management firm in Europe after Nutmeg, manages €250m in assets.

As part of the deal, BlackRock’s European, Middle East and Africa chief operating officer Patrick Olson will join Scalable Capital’s supervisory board.

BlackRock has already tied up with online wealth firms such as Aladdin Risk, iRetire, iCapital and FutureAdvisor in the US.

Olson says: “The retail distribution landscape is evolving at a rapid pace, as consumers increasingly engage with their financial investments through technology. This trend is prompting strong demand from European financial institutions – including banks, insurers, wealth managers and advisory firms – for high-quality technology-enabled investment solutions.

“Our investment in Scalable Capital allows us to meet these evolving needs of our clients and their customers and to help shape their business models for the future.”

Scalable Capital co-founder Adam French says the deal with BlackRock marks a “requirement” for wealth managers to remain competitive.

He says: [BlackRock’s] investment in our firm is a fantastic validation of our work so far, opens up new growth avenues for our business and firmly establishes us on the digital wealth management map in Europe. BlackRock’s backing provides a huge opportunity for us to partner with their clients to help accelerate our business with financial institutions and corporates.”