Why $11 trillion in assets isn’t enough for BlackRock’s Larry Fink
Subscribe to enjoy similar stories. BlackRock’s clients are pouring money into its core stock and bond offerings. To keep the momentum going, chief Larry Fink wants to push the world’s largest asset manager into the more lucrative world of private markets.
Managing more assets such as private equity, private credit, real estate and infrastructure would allow BlackRock to compete with the biggest alternative asset managers. It could also make BlackRock more valuable. Firms such as Blackstone, Apollo Global Management and KKR manage just a fraction of BlackRock’s $11.5 trillion in assets.
Yet those rivals command market values that are in the ballpark of BlackRock’s, which is around $150 billion. The reason: Private-market funds can charge more than BlackRock gets for much of its plain-vanilla, index-based funds. And the market rewards that.
Over the past one, three and five years, shares of Blackstone, Apollo and KKR have handily outperformed those of BlackRock. To change that, Fink is taking an “if you can’t beat ’em, join ’em" approach, largely through acquisitions. The 72-year-old, who has led BlackRock since its 1988 founding, isn’t a stranger to transforming the business through deals.
Building BlackRock into a formidable private-markets manager would help him solidify its status as King of Wall Street. Demand for private investments from institutional investors like pensions and insurance companies has soared over the past decade. As its clients increase their private market allocations, BlackRock is hoping to keep more of their business.
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