With a steely grip, a thick skin, and a clear vision of what the company could become, Lawrence D. Fink built BlackRock into the world's largest asset manager.
Today, the company is a custodian of $10.5 trillion in investor funds, a provider of advanced trading technology, and Mr. Fink serves as an informal financial advisor to many governments, including the United States. Along the way, he has endured criticism about BlackRock's policies and politics from members of both parties and even from independent presidential candidate Robert F. Kennedy Jr.
He has also received praise from shareholders.
But Mr. Fink's age (71) and BlackRock's sheer size are making it increasingly difficult to find new assets to manage. Investors were in the spotlight this week at BlackRock's annual shareholder meeting, hearing Mr. Fink talk about the company's performance and voting on ballot questions.
One of the biggest concerns is the issue of successors. Mr. Fink, BlackRock's chief executive and chairman, wields an unusual level of control for someone who heads a company of this size with nearly 20,000 employees. From writing LinkedIn posts defending BlackRock's policies to personally discovering important deals, he has given his stamp of approval to the entire company he co-founded in 1988.
Mr. Fink's all-hands-on-deck approach makes the question of who will succeed him important, even though there is a wealth of talent and several potential successors. This idea has become even more important as some shareholders are uncertain about how much growth BlackRock will achieve in the future.
“It's very difficult for anyone to argue that Larry hasn't done a great job at the company,” said Craig Siegenthaler, a Bank of America analyst who covers BlackRock. . “They have outperformed the industry and have grown significantly over all periods of time.” But Siegenthaler added that “Larry Fink's question” is an important one.
Asked about the concerns, BlackRock pointed to past public statements on the issue. For example, at last year's shareholder meeting, Mr. Fink said, “There is no greater priority for the BlackRock Board of Directors and myself than developing the next generation of leaders.''
Since the beginning of 2023, BlackRock has added $365 billion in new assets and the market value of its assets has increased by more than $1 trillion. Although the company's performance has been supported by a bull market (the S&P 500 stock index is up about 38% over the same period), investors are well-rewarding the company's performance. Shares of BlackRock, which has a market capitalization of about $120 billion, rose about 14%.
BlackRock has announced that several state pension funds, primarily in states with Republican-controlled legislatures, have been forced to withdraw from the fund due to Mr. Fink's comments and writings urging companies to consider environmental, social, and governance (ESG) goals. continues to grow despite the company's announcement that it will withdraw funds from the in their work. The Texas Permanent Schools Fund announced in March that it would withdraw $8.5 billion.
Mr. Fink has distanced himself from such comments over the past year. At the 2023 conference, he said he stopped using the term ESG because politicians had “weaponized” it.
Citigroup analyst Christopher Allen said BlackRock has become “more tactical in its messaging.” “I've become more calm.”
Still, at a Republican presidential primary debate in December, Vivek Ramaswamy called Fink “the woke industrial complex, the king of the ESG movement.”
BlackRock's core business is managing funds for both large institutional and individual customers. The company has become the world's largest provider of low-cost index funds through its iShares platform since acquiring Barclays Global Investors for $13.5 billion in 2009.
Additionally, BlackRock's technology platform, Aladdin, provides financial portfolio trading and risk measurement services not only to BlackRock's customers, but also to rivals such as Vanguard and State Street and other large firms. Masu.
“Growing up is hard in some ways,” Siegenthaler said. All asset managers see clients withdrawing funds, but BlackRock is so large that not only do they need to replenish their assets, they also need to significantly exceed the amount they withdraw. he said.
BlackRock has consistently said its assets represent a small portion, or about 4%, of the world's roughly $230 trillion in investable assets. The company also said its business mix allows it to continue expanding. Its closest competitors, Vanguard and State Street, manage roughly $9 trillion and $4 trillion.
In January, BlackRock announced plans to buy Global Infrastructure Partners for about $12.5 billion, its biggest acquisition since the deal with Barclays. The deal will allow BlackRock to expand into infrastructure investments, which it sees as a big growth area. The targeted company is one of the world's largest financiers involved in the construction and reconstruction of airports, bridges, tunnels, and even green energy projects.
The deal with Global Infrastructure Partners leverages Mr. Fink's deep network from his decades-long career on Wall Street, as well as his personal involvement in finding merger targets and negotiating deals. The deal is an example of how closely BlackRock operates its business, said two people familiar with the matter, who were not authorized to speak publicly. They pointed to the fact that Fink worked with Bayo Ogunlesi, CEO and chairman of Global Infrastructure Partners, at investment bank First Boston before founding BlackRock.
Mr. Fink is a key point of contact for top world leaders and Treasury secretaries, including in some cases, according to three people familiar with Mr. Fink's discussions and public records. That could include Federal Reserve Chairman Jerome Powell. His current and former colleagues say he regularly met by phone and in person with key political and economic figures to share insights and information about world events.
Mr. Fink has also been responsible for many of BlackRock's external messages, including writing an annual letter to the CEO and responding directly on LinkedIn to Republican criticism of BlackRock during a debate in December. deeply involved in aspects of
“BlackRock is a one-man show,” said Giuseppe Bivona, co-founder and co-chief investment officer of Bluebell Capital, a small London-based activist investor. Mr. Bivona's firm has campaigned for change at BlackRock, questioning both the size of the 17-member board and Mr. Fink's close relationship with directors. At the annual general meeting, BlackRock shareholders rejected Bluebell's proposal to have Mr. Fink step down as chairman.
To reassure shareholders, BlackRock has regularly highlighted its remaining senior executives. Mr. Fink has said he will step down as chief executive and chairman within the next few years, but said there is no clear successor, although several executives could take his place. BlackRock's president, co-founder Rob Capito, who runs the company with Mr. Fink, is 67 years old.
The speculation has become so rampant that current and former BlackRock employees are amassing bets on potential successors to Mr. Fink. Two senior executives, Rob Goldstein and Mark Wiedman, are the most likely successors.
Mr. Goldstein was chief operating officer and oversaw Aladdin's growth. Mr. Weedman, head of global client business, was known for building the company's iShares business. Both command the overall lead in these pools.
Mr. Fink and members of BlackRock's board also discussed two other potential successors, Chief Financial Officer Martin Small and International Head Rachel Lord, a person close to BlackRock said. It is said that there is Over the past two years, the company has announced expanded roles for Mr. Small and Mr. Lord.
At least one candidate to replace Mr. Fink recently retired. Salim Ramzi, former global head of iShares and index investing, was named Vanguard's next chief executive officer this week.