Laurence D. Fink built BlackRock into the world’s largest asset manager with a strong grip, thick skin and a clear vision of what the company could be.
Today, it is a custodian of $10.5 trillion of investor money and a provider of sophisticated trading technology, and Mr. Fink has been an informal financial advisor to many governments, including the United States. At the same time, he faced criticism from lawmakers on both sides of the aisle — and even independent presidential candidate Robert F. Kennedy Jr. — about BlackRock policies and politics.
He also earned the praise of its shareholders.
But the age of Mr. Fink — he’s 71 — and BlackRock’s massive size, which makes it difficult to find new assets to manage, are clouds on the horizon. They were on the minds of investors this week at BlackRock’s annual shareholder meeting, as they listened to Mr. Fink about the company’s performance and vote on ballot issues.
One of the greatest concerns is succession. Mr. Fink, BlackRock’s chief executive and chairman, exercises an unusual level of control for someone leading a company of its size, with nearly 20,000 employees. From writing LinkedIn posts defending BlackRock’s policies to personally seeking out major deals, he has put his stamp on the entire company, which he founded in 1988.
Because of the all-in approach of Mr. Fink, the question of who will succeed him has become important, despite a deep bench of talent and several potential successors. This has become more important because some shareholders are unsure of how much BlackRock will grow.
“It’s really hard for anyone to argue that Larry hasn’t done a great job at the company,” said Craig Siegenthaler, an analyst at Bank of America who covers BlackRock. “They’ve outperformed the industry and grown exponentially in every time period.” But Mr. Siegenthaler added that the “Larry Fink question” is an important one.
Asked about the concerns, BlackRock pointed to previous public statements on the matter. At last year’s shareholder meeting, for example, Mr. Fink said, “The BlackRock board and I have no higher priority 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. Even though its results were fueled by a bull market — the S&P 500 stock index rose about 38 percent over the same term — investors were well rewarded with the company’s performance. Shares of BlackRock, which has a market capitalization of about $120 billion, rose about 14 percent.
BlackRock continues to grow even as some state pension funds, mainly in states with Republican-controlled legislatures, have said they will pull money from it because of Mr. Fink urges corporations to consider environmental, social and governance, or ESG, goals. in their work. In March, the Texas Permanent School Fund said it would take back $8.5 billion.
Mr. Fink distanced himself from such statements last year; at a conference in 2023, he said he had stopped using the term ESG because politicians had “sworn” it.
BlackRock has become more “tactical in their messaging,” said Christopher Allen, an analyst at Citigroup. “It became more obedient.”
However, in a Republican presidential primary debate in December, Vivek Ramaswamy called Mr. Fink is “the king of the woke industrial complex, the ESG movement.”
BlackRock’s core business is managing money for clients — both large institutions and individuals. It is the world’s largest provider of low-cost index funds through its iShares platform, following its 2009 purchase of Barclays Global Investors for $13.5 billion.
In addition, BlackRock’s technology platform, Aladdin, provides trading and risk measurement services for financial portfolios, not only to BlackRock’s clients but also to rivals such as Vanguard and State Street and other large companies.
“Being big is hard on some level,” Mr. Siegenthaler said. All asset managers see clients withdrawing money, but because BlackRock is so big, it not only needs to replenish assets, but it must do so in excess of what was withdrawn, he said.
BlackRock has consistently said its assets represent only a tiny fraction — or about 4 percent — of the roughly $230 trillion in investable assets in the world. The company also said it can continue to expand because of its business mix. Vanguard and State Street, its two closest competitors, manage about $9 trillion and $4 trillion, respectively.
In January, BlackRock announced plans to buy Global Infrastructure Partners for about $12.5 billion, which would be its biggest acquisition since the Barclays deal. The deal will allow BlackRock to expand into what it sees as a big growth area – infrastructure investment. The target company is one of the largest global financiers of the construction or reconstruction of airports, bridges, tunnels and even green energy projects.
The deal with Global Infrastructure Partners is also an example of how closely Mr. Fink the BlackRock business, using his deep network from a decades-long career on Wall Street and even scouting for merger targets and personally negotiating transactions, according to two people with knowledge of the matter. in the deal not authorized to speak publicly. They pointed out the fact that Mr. Fink worked with the chief executive and chairman of Global Infrastructure Partners, Bayo Ogunlesi, at the investment bank First Boston before founding BlackRock.
Mr. Fink is the main — and in some cases only — point of contact for top world leaders and financial leaders, including at times the chairman of the Federal Reserve, Jerome Powell, according to three people familiar with the matter. discussions and public records of Mr. Fink. Current and former colleagues say he is regularly on the phone or in face-to-face meetings with key political and economic figures, sharing insights and information on world events.
Mr. also had a lot to do with it. Fink in many aspects of BlackRock’s messaging to the outside world, whether it’s writing his annual letter to chief executives or choosing to respond directly on LinkedIn on Republican criticisms of BlackRock in the December debate.
“BlackRock is a one-man show,” said Giuseppe Bivona, a co-founder and co-chief investment officer of Bluebell Capital, a small activist investor based in London. The company of Mr. Bivona has been agitated for change at BlackRock, questioning both the large size of its 17-member governing board and Mr. Fink to the company’s directors. At the annual meeting, BlackRock shareholders voted down a Bluebell proposal calling on Mr. Fink stepped away from the role of chairman.
To appease shareholders, BlackRock regularly highlights its remaining senior executives. Mr. Fink, who said he will step down as chief executive and chairman in a few years, said there is no clear successor but several executives could fill his seats. BlackRock president Rob Kapito, a co-founder who runs the company with Mr. Fink, is 67 years old.
Speculation is rife that current and former BlackRock employees have betting pools with bets on potential replacements for Mr. Fink. Two senior executives — Rob Goldstein and Mark Wiedman — are considered the most likely successors.
Mr. Goldstein, the chief operating officer, oversaw the growth of Aladdin. Mr. Wiedman, the head of the global client business, is best known for building the company’s iShares business. Both command wide leads in those pools.
Mr. also discussed Fink and members of BlackRock’s board considered two other executives – Martin Small, the chief financial officer, and Rachel Lord, head of international – as possible successors, said a person close to BlackRock. Over the past two years, the company has announced expanded roles for both Mr. Small and Ms. Lord.
At least one potential successor of Mr. Fink left recently. Salim Ramji, global head of iShares and index investments, is appointed this week as Vanguard’s next chief executive.
