Larry Fink: Black stone Chief Executive Larry Fink said he was open to more acquisitions as the world’s largest asset manager increasingly seeks to position itself as a one-stop shop for investors.
“I see some very big opportunities for inorganic growth,” Fink told Bloomberg TV’s Danny Berger at the Global Dialogue Forum in Berlin on Friday. The company’s co-founder was responding to a question about whether he would consider the acquisition as transformative as the $15.2 billion purchase of Barclays Global Investors in 2009. BGI’s IShares exchange-traded funds and quantitative strategies were added, making it the world’s largest. fund manager from one day to the next.
After years of dominating equity and debt investments, BlackRock, which now manages $9.4 trillion in assets, offers clients not only exchange-traded equity and bond funds, but also private asset strategies, as well as technology, data, analytics and financial market consulting. As part of its alternative strategy, it announced earlier this year the acquisition of London-based private debt manager Kreos Capital. BlackRock is actively involved in alternative investments and expanding its business in the private market. In 2019, the company bought French software provider eFront for $1.3 billion in cash to expand private equity and real estate analytics for clients and enhance its Aladdin risk management technology platform. Fink said in an interview Friday that private money could play a critical role as most democracies grapple with growing fiscal deficits and debt overhangs. Warning of a crisis, he said the only solution is to recalibrate and reinvent the way it finances its growth. “The way we finance growth is from the public and private sectors,” he said. “There is so much private money looking for long-term investments.”
Speaking at an event in Berlin, he said he expects 10-year borrowing costs to remain at 5% or higher due to inflation, adding that investors are underestimating the impact of geopolitical changes on structural inflation. In the long run, he says, the fragmentation of supply chains means higher wages.
“Business leaders and politicians have not given any rationale to explain this,” he said. “We haven’t seen inflation like this in over 30 years.”
All of this means that companies will use technology more aggressively to drive productivity through more robots or artificial intelligence, he said. However, he added that AI could do the most damage to some of the fastest-growing economies, as they would face the most job losses. Fink said he has told every political and business leader he meets that they need help to create more “security” and “hope” but he sees only “fear” in reference to China’s stockpiles. Examples of interest rate increases.
“To me, it’s a sign of greater hope when we see savings rates go down and their spending go up,” he said. He said some economies could enter recession earlier, with the U.S. possibly in 2025, without elaborating.
“Whatever recession we face will be mild, so I’m not too worried,” he said.