One of the big questions on Wall Street is when Larry Fink, the long-time CEO and founder of money-management behemoth BlackRock, will decide to retire.
The answer: Never, if Fink has his way.
The CEO of the world’s largest asset-management firm has alerted his top people that he is sticking around for the foreseeable future, at least until BlackRock absorbs some $28 billion in new acquisitions it made in the past year or so intended to expand its footprint beyond plain-vanilla investing on behalf of clients, On The Money has learned.
Fink’s plan to remain in his job without a clear retirement date is why one potential successor, Mark Wiedman, the managing director of the firm’s global client business, announced last month that he is leaving after around 20 years at the firm.
Wiedman is 54, and Fink is a very healthy 72, or as one BlackRock insider told On The Money, “Larry has the energy of a 27-year-old, and he’s having the time of his life.”
A company flack tells me succession planning is always being discussed by the BlackRock board, but if you know anything about this company, it’s Fink’s baby, and they report to him.
He started BlackRock in 1988, after being jettisoned from the old First Boston Corp., following some significant trading desk losses. The firm was first an asset-management subsidiary of the Blackstone Group, one of the pioneers of private equity created by Stephen Schwarzman and Pete Peterson.
By 1992, Fink’s baby was growing exponentially (as was his ego that brushed up against the sizable one of Schwarzman’s), so much so that he bought himself out of Blackstone for a mere $300 million. Today, BlackRock has a market value of $150 billion and manages $11.6 trillion in assets.
When asked about letting Fink and BlackRock go, Schwarzman once quipped that it was “the biggest mistake” he’s made as a CEO.
Another reason it was a mistake for Schwarzman to let Fink go is that they are — thanks to those acquisitions — increasingly direct competitors, a little known fact on Wall Street except in the offices of both places.
Blackstone is the king of the private equity business, with $1.1 trillion in assets taken private that will at some point be sold. BlackRock has been mainly a manager of other people’s assets, a so-called passive investment adviser that sells stuff like exchange traded funds and advises public pension funds here and abroad.
But there is a BlackRock-Blackstone war going down, with the former encroaching on the latter’s turf. Last year, BlackRock bought private credit firm HP Partners, which provides loans to businesses. BlackRock now has two PE platforms, and it offers banking services to general partners of private equity outfits. It has teamed with PE firm Partners Group to offer investors access to this lucrative market.
I know what you’re saying, isn’t Larry Fink “Mr. ESG,” the acronym for the controversial, and woke Environmental Social Governance investing? He was. Little secret: ESG makes up a $1 trillion of BlackRock’s $11 trillion in AUM, and much of it comes from overseas investors.
Fink used to talk up ESG. No longer after he took a lot of grief from Red State pols, including those who run pension funds in places like Texas and Florida, he has since been downplaying ESG here in the US. That combined with some savvy lobbying from his government affairs team has quelled a lot of the Red State anger.
Not being a target of conservative scorn has its benefits: Fink is focused on the business. Earnings are up, as is his AUM, as On The Money previously reported
He’s expanding into crypto ETFs and increasingly, competing against his old pal, Schwarzman.
And he doesn’t want to retire, because as an associate told me, “he’s having too much fun.”
