Who is Larry Fink? The “King” holds 10,000 billion USD

Larry Fink, BlackRock Inc. CEO, is managing nearly $10 trillion in assets for retirement funds, non-profit trusts, government entities, businesses, and individuals, accounting for more than 10% of the global GDP in 2020.

Larry Fink has accomplished something remarkable that not everyone can achieve. So, who is Larry Fink? Let’s explore through the article from AZCoin.

Who is Larry Fink?

Larry Fink is the founder and CEO of BlackRock, an investment fund that manages about $10 trillion in assets including endowments, governments, companies, individuals, and pension funds. This amount of assets is equivalent to about 10% of the world’s GDP in 2020.

In addition, BlackRock under Larry Fink has also become one of the three largest shareholders, holding more than 70% of the companies in the S&P 500 basket. Just a small move by Larry Fink can cause the stock market and index to reverse in a split second.

Larry Fink was born in November 1952 in Los Angeles, USA, to a middle-class family. His father was a shoe store owner and his mother was a professor at California State University. During his youth and college years, Larry Fink did not do any advanced economics subjects except for some basic courses in the curriculum.

He only really paid attention to economics when he attended a real estate class for seniors and then a graduate program. After graduating with a master’s degree in business administration from the University of California, Larry Fink immediately went to Wall Street with empty pockets and a mind full of knowledge.

In 1976, Larry Fink joined First Boston, a well-known company in the asset management industry. Here, he worked in the bond trading department with the specific job of managing collateralized bonds. In 1978, with his efforts, Larry Fink was appointed head of this department and earned the company billions of dollars. By the age of 31, Larry Fink was appointed CEO, becoming one of the youngest people to hold this position.

However, things were not easy for Larry Fink. In 1986, he and his associates caused a loss of up to 100 million USD for the company and he was immediately fired. The biggest reason was that he was too arrogant and ignored the obvious signals of a government interest rate cut.

As a result, he was abandoned even though he had previously earned billions of USD for the company. This was not only a failure but also a stepping stone for Larry Fink to review himself and step into the chair of power of BlackRock after that.

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Larry Fink’s career

In 1988, after 2 years of leaving First Boston, Larry Fink, Rob Kapito and 6 others, all former colleagues at First Boston, founded BlackRock Financial Management under the auspices of the Blackstone Group. During its establishment and development, before separating to operate independently, BlackRock Financial Management gradually conquered the financial market. By 1994, BlackRock managed more than 20 billion USD in assets.

After completely separating from Blackstone, Larry Fink remained CEO and launched strategic products, giving BlackRock a unique position in the fund management industry.

Specifically, in 1999, BlackRock launched a risk management platform called Aladdin, which was extremely popular with corporate clients and now manages more than $20 trillion in assets.

Then, in 2009, BlackRock, under the direction and execution of Larry Fink and Rob Kapito, participated in a deal of the century, which brought the BlackRock name to the same level as Vanguard and Three State.

Specifically, in 2009, after the subprime mortgage crisis, the US economy was more chaotic than ever. Lehman Brothers Bank Just Collapsed and became a giant pie for other companies to tear apart.

One of those names was Barclays, but the acquisition of Lehman Brothers was not a successful deal because this company did not have enough resources to restructure Lehman Brothers’ debts.

Therefore, they were forced to sell themselves to another capital to avoid being intervened by the British government. At that time, there were 2 parties that really wanted Barclays’ ETF business called iShares: BlackRock of Larry Fink and CVC, a private securities company based in London.

In essence, Barclays had reached an agreement to sell the business to CVC in early April 2009, but the terms of that agreement also stated that within 45 days of the agreement being signed, Barclays had the right to reject CVC and sell itself to a higher bidder.

This is where Rob Kapito and BlackRock came in. On April 16, 2009, Rob Kapito personally flew to New York to meet with Bob Diamond, CEO of Barclays, at the Yankee Stadium Classic baseball game against the Cleveland Indians. The home team lost miserably that day, but in the stands, a strategic merger was signed and Rob Kapito was the only winner that day.

Just a few days after Rob Kapito’s meeting, Barclays’ top brass and BlackRock’s boss came to the conclusion of the merger of the two companies, BlackRock and the BGI business. Two months later, they announced this information to the world with a deal value of up to 13.5 billion USD.

From here, the name BlackRock really stepped into the light, after the above deal, this company became the world’s largest asset management company with a variety of clients from prisoners to politicians and billionaires around the world.

Some information related to Larry Pink that you can refer to: iShare, ETF Fund, Sustainable Investing

Larry Fink saved the US government twice

Guiding America through the 2008 crisis

When the 2008 economic crisis broke out, almost all US financial entities were passive and did not know how to respond to these huge debts. Therefore, then-Fed Chairman Tim Geithner and Treasury Secretary Hank Paulson asked for help from Larry Fink.

Both officials wanted Bear Stearns to be taken over by JPMorgan Chase because this entity was strong enough to handle the debt. However, the company feared that the assets that Bear Stearns was pledging could turn into nothing.

At this point, a dilemma was formed between the two sides that no one could find a solution except Larry Fink. His solution was very simple: create a company sponsored by the Fed, which could absorb the bad assets of Bear Stearns so that JPMorgan Chase could absorb the liquid assets.

This solution of Larry Fink not only helped JPMorgan Chase get rid of the bad debts but also helped put the risky assets under the supervision of Larry Fink and the US government.

US $2 trillion Covid relief package planned

Back in March 2020, when the US was struggling to cope with the impact of the Covid pandemic, the financial markets of stocks, securities and bonds continuously fell seriously.

At that time, in a meeting in the Oval Office, the question was raised about how much money should be pumped in to save the economy and when the government could withdraw this amount of money, only one person in that meeting had the answer and solution.

Specifically, the US government pumped more than 2,000 billion USD into the bond market through a unit of BlackRock. This was to keep that amount of money circulating in the corporate bond channel. After the situation stabilized, the FED would buy back these bond funds and indirectly withdraw the above amount of money back into its pocket.

Summary

Above is an introduction about Larry Fink as well as what he achieved during the formation and development of BlackRock. Through the article, AZCoin hopes to bring readers the most comprehensive overview of Larry Fink as well as his successes and influence.