The speed and trajectory of BlackRock’s ascent have been breathtaking. Justifiably proud of this climb, Fink is fond of pointing out that it dwarfs that of the S&P 500 (up not even one time for the same period) and also wallops that of many well-known stocks, such as Berkshire Hathaway (up three times). That’s 22 times the original price, and today the company has a market value of about $53 billion. In another distinction, BlackRock has been a supernova stock, shooting from a 1999 IPO price of $14 a share to about $320 recently. But if one of its actively managed funds barrels into a stock as well, the percentage can jump well above that range. Ordinarily its stake in an indexed company is 4% to 6%. For one, its $2.9 trillion in passive investments–that is, its holdings in index funds and ETFs–have left it owning more shares in more American companies than any other party. What was once eight partners has grown to more than 11,000 employees worldwide.īlackRock has along the way gained other distinctions. Other businesses took in $1 billion in revenues, for a company total of $10 billion, along with $2.9 billion in profits. For the year, the company’s fees from managing that pile ran to about $9 billion–about 22 basis points per dollar of assets. By the end of 2013 the company had a colossal $4.3 trillion of assets under management (AUM). After that, ETFs kept gaining popularity (riding a secular trend toward “passive” investment), and the stock market kept rising. BlackRock came in last year at 11.1%, which was below even the Fortune 500’s median, 13.7%.įrom an also-ran position in 2004, BlackRock became the No. An asset manager that has grown organically may have–as T. In the equity realm, BlackRock bought State Street Research & Management in 2005, Merrill Lynch Investment Managers in 2006, and then–as the financial world blew up–no less than the then-largest asset manager, Barclays Global Investors, with its mountain of exchange-traded funds (ETFs) called iShares.įink agonized about handing over more than $15 billion in stock and cash to buy BGI in 2009, and in fact that outlay has given BlackRock a capital structure that throws off subpar returns on equity. The company began to grow, first in fixed income (which was in the early stages of a 30-year bull market) and next in the less familiar world of equities, where both separate accounts and mutual funds beckoned. So his band re-created themselves as asset managers. Fink’s transformative idea was that the buy-side half of a trade needed help to understand these products. They were inventors and traders of the complex asset-backed instruments–like mortgage-backed securities–then newly available. They were sell-side bond experts, but not just any sell-side experts. They’d been Wall Streeters, at First Boston and Lehman. The oddball in this party of five was BlackRock (BLK), formed in 1988 by Fink and seven partners. Four were the usual suspects from tech land: Amazon, eBay, Facebook, Google. When Fortune published its 2013 list of the world’s 50 Most Admired Companies, five among them were 25 years old or less. Then he will go home, read the news, and be in bed at 10:30 p.m., expecting to sleep soundly before it all begins again at 5:15 a.m.Įxhausting, right? Yet there is also something in this picture of Fink’s unslackening day that quite perfectly matches BlackRock’s short but remarkable history. And, yes, there will be breakfast in the office (cereal with blueberries and bananas) and a lunch (perhaps with a financial luminary at a prominent restaurant) and, on probably three nights–he hopes not four–a business dinner. By 7:30, Fink is into appointments likely to continue steadily–except that he always breaks in the morning to call his wife, Lori–until he leaves at about 6:30 p.m. Or he may interrupt himself by videophoning some BlackRock executive, whom he certainly expects to be available. At 6:00 a.m., in his office, he hopes for an hour of what he calls “dead time”: time to think. He will be carrying three newspapers–the New York Times, the Wall Street Journal, and the Financial Times–that he has already read online the night before. It begins at 5:15 a.m., when Fink rises at his Upper East Side apartment in Manhattan to get ready for a 5:45 car that will drop him minutes later at the company’s Midtown headquarters.
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