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"Interest in Bitcoin is now reaching the first pension funds"

Dirk Klee
Country Manager BlackRock Schweiz

 

As CEO of Bitcoin Suisse, you immersed yourself in the crypto world. Now you are at BlackRock, an asset manager that is fully committed to crypto. Did this make the transition to your new role easier?

I see myself as a bridge builder between the traditional financial world and fintech. This bridging function has been a recurring theme throughout my career – whether as co-founder of iShares in Europe or in building digital investment platforms. My motivation has always been to make new technologies accessible to a broad customer base. Now, at BlackRock, I can continue to drive this forward on a global level. During my time as CEO of Bitcoin Suisse, I immersed myself deeply in the world of digital assets – an area that is now increasingly reaching market maturity and gaining wider acceptance among customers. The fact that we at BlackRock are addressing this issue provides me with the ideal platform to contribute my experience.

There are still numerous financial service providers and asset managers who steer clear of Bitcoin and other cryptocurrencies. The reasons for this are manifold: from reputational and money laundering risks to regulatory uncertainties and blanket rejection. Can you understand this?

I can only understand this reluctance to a limited extent. Digital assets are still relatively young, but the industry has developed significantly in recent years. Today, it is much more institutional, mature and secure. Numerous control mechanisms have been established that enable professional providers to manage risks effectively. With Bitcoin in particular, we are seeing a noticeable decline in volatility – one of the main arguments against crypto is thus losing weight. Technological progress is also clearly evident: blockchain solutions offer the potential to make processes more efficient, transparent and cost-effective. Anyone who fails to address these developments today risks being left behind.

What do you see as the main arguments in favour of Bitcoin or crypto as an asset class?

It is important to distinguish clearly between Bitcoin and other cryptocurrencies. Since 2009, Bitcoin has established itself as the leading digital currency – with a clearly limited supply of 21 million coins and growing demand. This scarcity makes Bitcoin attractive as ‘digital gold’ and potentially as a new, stable asset class alongside traditional assets. With other cryptocurrencies, the focus is more on the underlying technology. Many of these projects aim to make the financial world more efficient, transparent and secure – whether through smart contracts, tokenisation or new infrastructure models. An investment in these assets is therefore often also an investment in the further development of the technology.

Do you see demand from institutional investors, such as pension funds, for crypto investment solutions?

What we are currently observing is growing institutional interest: the development began in the private customer sector, moved on to family offices and is now reaching the first pension funds and other institutional investors. We are still in the early stages here, but interest is high, as is the demand for regulated, professional access.

Another clear trend is passive and index products, which have accounted for the lion's share of net new money at BlackRock and in the industry as a whole for years. With regard to active and alpha-generating active asset management, where is the passive trend heading?

The trend towards passive or index-based products continues unabated – and for good reason. Alpha, i.e. the sustainable excess return generated by active management, is often inconsistent across the board. Index products, on the other hand, offer transparency, cost efficiency and ease of trading, especially ETFs. At the same time, we are seeing an exciting development: the investment universe is expanding, and hybrid solutions such as active ETFs are emerging that combine the best of both worlds – the efficiency of passive structures with the flexibility of active strategies. These ‘blended’ approaches offer great potential for innovation. Overall, the market is evolving away from an either/or approach towards a both/and approach.

BlackRock has helped itself to a stronger foothold in this area thanks to acquisitions in the private markets sector. How is demand developing in Switzerland?

Demand for private markets is traditionally strong in Switzerland – even stronger than in many other European markets. This is also due to the structure of the Swiss financial centre, the professionalism and the long-term investment horizon of many investors. A key driver is the fact that around 80% of companies worldwide are not listed on the stock exchange. This opens up a huge, often untapped market that is becoming increasingly attractive to investors – especially in an environment where IPO activity is declining. Our acquisitions in the private markets sector should be viewed in precisely this context: they expand our offering in a targeted manner and enable us to meet growing customer demand. We see particular potential in Switzerland and are aligning our product offering accordingly.

You also served as BlackRock's country head for Germany: How do the German and Swiss markets differ for a US asset manager?

The two markets differ significantly in terms of structure and orientation. Germany is strongly institutionalised, with a focus on insurance companies and pension funds. In the private client business, third-party distribution via banks and, increasingly, digital platforms dominates. Switzerland, on the other hand, is a global wealth management centre. It plays a central role not only nationally but also internationally. The market is highly developed, with very demanding, often internationally oriented clients. This high level of client sophistication makes Switzerland particularly valuable – especially for providers with a broad, global product range.

Your career has been extremely varied: asset management, wealth management, major banks, crypto brokers... What are the biggest differences and what are the similarities?

In general, I see the biggest differences in the business model and corporate culture. Banks work with their own balance sheets, while asset managers act as trustees, i.e. without their own books. This changes the focus: asset managers are often more long-term and customer-oriented. I find it particularly exciting how strongly culture and entrepreneurial spirit shape our company – an entrepreneurial spirit that combines innovation and responsibility. But what connects all these stages is the interest I mentioned at the beginning in operating at the interface between the financial world and technology. No matter where I worked, it was always about developing new solutions and making complex topics more accessible to customers.

Can you imagine working outside the financial industry?

Basically, I feel very at home in the financial world. Under certain circumstances, however, I could also imagine passing on my knowledge and experience in a different context – for example, in an academic role.