40 years of innovation in pursuit of alpha

Key points

• Over four decades, our systematic platform has expanded across asset classes and vehicles—built to seek consistent, differentiated investment outcomes.
• The use of alternative data, machine learning, and artificial intelligence have added tremendous depth and dynamism to our process over the years.
• Staying ahead today demands creativity and innovation, making human insight key to unlocking potential investment opportunities.

2025 marks 40 years since launching our first systematic investment strategy, laying the foundation for what has grown into a $317 billion investment platform spanning equities, fixed income, and alternatives.¹ We set out with the goal of bringing clients consistent and differentiated investment outcomes by embracing the power of human expertise, data, and technology.

This core philosophy remains unchanged, yet the insights, models, and markets we invest across have evolved significantly. The timeline below captures key milestones in our commitment to driving innovation in investing.

Adding depth with data

Systematic investing has always centered on optimizing the trade-off between expected risk, return, and cost. But the tools we use to address that problem have advanced significantly with new insights and technologies.

The 2007 “quant quake” represented a pivotal moment in the evolution of our approach. Quantitative portfolios that relied on similar models and trading strategies came under pressure, driving significant losses across the industry. This period began to shift our perspective on what it meant to be truly innovative, leading us to explore new and alternative datasets, applications of machine learning, and eventually the integration of artificial intelligence. This marked a new era in our pursuit of consistent and differentiated alpha.

Alternative data helps us seek an investment edge by uncovering insights that go beyond traditional economic and financial metrics. This includes sources like geolocation and real-time mobility data, online search activity, consumer transactions, and unstructured text from news articles and company conference calls. A single data source—such as online job postings—can uncover a wealth of insights, from revealing a company’s strategic growth priorities and geographic footprint to identifying broader economic trends through wage patterns and labor demand. Exponential growth in the availability of data over time has made the world more measurable and accessible through a scientific lens, expanding opportunities to generate data-driven insights. What began as just three investment signals 40 years ago has grown to more than a thousand in our arsenal today, each designed to capture an informational advantage.

Harnessing this abundance of data has required bigger and more sophisticated models. Just 20 years ago, the amount of data our models were leveraging could fit on a single smartphone that we use today. Now, advances in algorithms and computing power allow us to analyze much larger and more complex datasets. This evolution has transformed our investment process, from enhancing security selection and basket construction, to helping us effectively combine and weight hundreds of insights with dynamism and adaptability.

The convergence of big data and big models is unlocking more granularity, speed, and scale in our process than ever before. But no matter how much information is at our disposal, the future is bound to look different from the past. This is where human insight and expertise in economics and financial markets is a key complement to our quantitative skillsets and tools. This allows us to address a wider range of investment questions with innovative ideas that are grounded in sensibility and data. While there’s more that we can measure today than ever before, the “art” of investing lies in our ability to anticipate and adapt to circumstances that our models may not be trained for.

“Breaking the code” across asset classes

The past 40 years have also been defined by our expansion into markets beyond public equities. Historically, the application of systematic investing to fixed income was met with skepticism. While it required a distinct approach from equities, we successfully developed and implemented fixed income models by drawing on the combined expertise of portfolio managers, quantitative researchers, and traders.

Since launching our first credit strategy 25 years ago, the opportunity set for systematic investing in fixed income has expanded significantly. Previously, limited price transparency, higher transaction costs, and lower liquidity constrained the ability to capture cross-sectional alpha in credit markets. Today, higher-quality and more abundant data, along with the rise of electronic and portfolio trading, have helped reduce these frictions while contributing to a richer landscape for security selection. While this evolution has attracted new entrants in recent years, the bar for generating alpha in fixed income remains high. This is where our decades of expertise—combined with continuous innovation and investment in data, technology, and computational infrastructure—provide a meaningful advantage.

Data is ubiquitous, and its value extends well beyond public markets. Over a decade ago, we began researching the use of alternative data in the more opaque world of private equity. Insights into things like hiring activity, brand awareness, and employee sentiment have helped bridge critical information gaps and enhance our ability to forecast successful exits. We’ve been able to deploy these insights in partnership with private market investors across BlackRock, merging domain expertise with alternative data to uncover opportunities in private equity.

A formula for relentless innovation

In 1985—the year we launched our first strategy—Microsoft released the first official version of Windows, and the first mobile phone (“the brick”) had just become broadly available. Technological change has since taken us from a world where industry expertise and knowledge was relatively expensive and difficult to access, to one where vast information exists in each of our pockets. As investors, this raises the importance of creativity and curiosity in the ways that we add value to client portfolios.

We channel that creativity towards building investment solutions that meet the evolving needs of client portfolios—targeting outcomes like alpha, income, and diversification with consistency over time. Today, these strategies are more accessible than ever before with new vehicles and structures suited for a wide range of client portfolios globally.

Looking ahead, our future will be shaped by bold innovation and the continual reinvention of our process, all while staying true to the guiding principles that have anchored us over the past four decades. As markets evolve, so will the questions we ask, the insights we seek, and the ways we serve our clients. With a powerful combination of human insight, scientific rigor, and technological scale, we remain committed to reshaping what's possible in investing—today and for years to come.