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BlackRock to take a minority equity stake in digital investment manager Scalable Capital

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Scalable Capital has secured a EUR30 million funding round, led by BlackRock alongside existing investors HV Holtzbrinck Ventures and Tengelmann Ventures.

This funding round is one of Europe’s largest for a digital investment manager to date, bringing Scalable Capital’s total funding to EUR41 million. BlackRock has taken a significant minority equity stake in Scalable Capital to help them grow their business with financial institutions and corporates. Patrick Olson, BlackRock’s Chief Operating Officer of EMEA, will join Scalable Capital’s Supervisory Board.
 
Scalable Capital, based in Munich and London, is one of Europe’s fastest growing digital investment managers. Since its launch just 16 months ago, Scalable Capital has already gathered over EUR250 million (GBP217m) of assets from over 6,000 retail clients, and has established a leading proposition with strong demand from financial institutions and corporates. The firm has seen strong growth in the UK and Germany, two of the most attractive and competitive markets for digital investment managers in Europe, and has the ability to expand its offering even further across the Continent. The offering provides a flexible multi-language and currency platform that can operate across multiple international tax and regulatory regimes.
 
Patrick Olson, Chief Operating Officer of EMEA at BlackRock, 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.”
 
BlackRock has a deep heritage in technology. From the creation of Aladdin, its risk management and analytics platform, to its more recent expansion in digital wealth management solutions, the firm has developed and invested in the industry’s most sophisticated technologies, delivering them in an accessible way to its clients to help them achieve better outcomes. The investment in Scalable Capital complements BlackRock’s existing digital wealth management suite, which includes Aladdin Risk for Wealth, iRetire, iCapital and FutureAdvisor in the US.
 
Adam French (pictured), Co-Founder and Co-CEO at Scalable Capital, says: “BlackRock shares our vision that technology is not just a competitive advantage but a requirement for wealth management businesses to be successful in the future. Its 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.”
 
Scalable Capital expects the changing regulatory landscape in Europe to result in the need for financial institutions to increase investor protection, value for money and transparency. Consequently, firms will be seeking technological solutions to assist with portfolio construction, risk management, and digital distribution. Scalable Capital’s platform provides a practical solution for firms looking at technology to help shape their business models for the future.
 
Scalable Capital will remain an independent company. Its product selection and asset allocation decisions will continue to be independent.
 
The investment is subject to regulatory approval and expected to close in the third quarter of 2017.

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