Laurence D. Fink

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Larry Fink
Laurence Douglas Fink (cropped).jpg
Born
Laurence Douglas Fink

(1952-11-02) November 2, 1952 (age 67)
EducationUniversity of California, Los Angeles (BA, MBA)
Net worthUS$1 billion (April 2018)[1]
TitleChairman and CEO, BlackRock
Political partyDemocratic

Laurence Douglas Fink (born November 2, 1952) is an American billionaire businessman. He is the chairman and CEO of BlackRock, an American multinational investment management corporation.[2] BlackRock is the largest money-management firm in the world with more than $6.5 trillion in assets under management.[3] Although BlackRock is private its 6.96 trillion dollars in assets and wide range of investments gives the firm enormous power over the global financial system.[4] Activists and economic watchdogs have tried to get BlackRock designated as a systemically important financial institution (or SIFI), which would subject it to the highest legal standards for safety and transparency.[5][6] In April 2018, Fink's net worth was $1 billion.[1] He is also a lifelong major Democratic donor.[7]

Early life and education[edit]

Fink was born on November 2, 1952.[8][9] He grew up in a Jewish family[10] in Van Nuys, California, where his mother was an English professor and his father owned a shoe store.[3] He earned a BA in Political Science from UCLA in 1974.[9] Fink is also a member of Kappa Beta Phi.[11] He then received an MBA in Real Estate at the UCLA Anderson Graduate School of Management in 1976.[9][12]

Career[edit]

1970 to 2000[edit]

Fink started his career in 1976 at First Boston, a New York-based investment bank.[citation needed] Eventually taking charge of First Boston's bond department, Fink was instrumental in the creation and development of the mortgage-backed security market in the United States.[13] At First Boston, Fink was a member of the Management Committee, a Managing Director, and co-head of the Taxable Fixed Income Division; he also started the Financial Futures and Options Department, and headed the Mortgage and Real Estate Products Group.[14]

Fink added as much as $1 billion to First Boston's bottom line. He was successful at the bank until 1986, when his department lost $100 million due to his incorrect prediction about interest rates.[3] The experience influenced his decision to start a company that would invest clients' money while also incorporating comprehensive risk management.[3]

In 1988, under the corporate umbrella of The Blackstone Group, Fink co-founded BlackRock and became its Director and CEO. When BlackRock split from Blackstone in 1994, Fink retained his positions, which he continued to hold after BlackRock became more independent in 1998. His other positions at the company have included Chairman of the Board, Chairman of the Executive and Leadership Committees, Chair of Corporate Council, and Co-Chair of the Global Client committee.[3][14] BlackRock went public in 1999.[15]

BlackRock is the largest investor in fossil fuels on earth, playing so central a role in financing climate change that it is the subject of the “BlackRock’s Big Problem” campaign by environmental groups like the Sierra Club.[16] BlackRock is also a major investor in military weapons. One of BlackRock’s exchange traded funds (ETFS) is the “iShares U.S. Aerospace & Defense ETF”, a fund for investors looking to support companies like Northrop Grumman, Lockheed Martin, and Raytheon.[17]

2000s[edit]

Fink, third from right, receiving a Woodrow Wilson Award in April 2010

In 2003, Fink helped to negotiate the resignation of the CEO of the New York Stock Exchange, Richard Grasso, who was widely criticized for his $190 million pay package.[3] In 2006 Fink led the merger with Merrill Lynch Investment Managers, which doubled BlackRock's asset management portfolio.[9] That same year, BlackRock's $5.4 billion purchase of Stuyvesant Town–Peter Cooper Village, a Manhattan housing complex, became the largest residential-real-estate deal in U.S. history. When the project ended in default, BlackRock clients lost their money, including the California Pension and Retirement System, which lost about $500 million.[3]

The U.S. government contracted with BlackRock to help clean up after the financial meltdown of 2008. Although BlackRock is widely believed to have been the best choice for the cleanup job,[18] Fink's longstanding relationships with senior government officials have led to questions about potential conflict of interest regarding government contracts awarded without competitive bidding.[3] BlackRocks contract allowed Fink to cultivate relationships with Obama’s first Treasury Secretary Tim Geithner and additional members of the Obama economic recovery team.[19] In 2016 Fink hoped to become part of the federal government himself as Hillary Clinton's Treasury Secretary.[20] At the same time, Blackrock hired many former executive branch appointees to its firm including Cheryl Mills, Christopher Meade, Katheryn Rosen, Michael Pyle, Coryann Stefansson, Gary Reeder, and Ken Wilson.[21] This move strengthened BlackRock’s revolving door with the federal government.[22]

In December 2009, BlackRock purchased Barclays Global Investors, at which point the company became the largest money-management firm in the world.[3] Despite his great influence, Fink is not widely known publicly, apart from his regular appearances on CNBC.[3] BlackRock paid Fink $23.6 million in 2010.[23] By 2016, BlackRock had $5 trillion under management, with 12,000 employees in 27 countries.[24][25]

In 2016, Fink received the ABANA Achievement Award in New York City. It recognizes an individual who exemplifies outstanding leadership in banking and finance and has a commitment to positive professional cooperation between the US and the Middle East and North Africa.[26]

In 2018, Fink was ranked #28 on the Forbes list of The World's Most Powerful People.[27]

During the coronavirus pandemic of 2020 the Fed has turned to BlackRock to help it purchase distressed securities in an echo of 2008.[28]

Larry Fink is also longtime donor and supporter of the New York City Police Foundation: a group that provides financial support to the New York City Police Department. The non-profit Color of Change called on Fink to divest from the NYC Police Foundation in the wake of George Floyd's murder by a white policeman and nationwide protest.[29][30]

Community involvement[edit]

Fink serves on the board of trustees of New York University, where he holds various chairmanships including chair of the Financial Affairs Committee. He also co-chairs the NYU Langone Medical Center board of trustees and is a trustee of the Boys and Girl's Club of New York. Fink is also on the board of the Robin Hood Foundation.[31] Fink founded the Lori and Laurence Fink Center for Finance & Investments at UCLA Anderson[32] in 2009, and currently serves as chairman of the board.[33]

In December 2016, Fink joined a business forum assembled by then president-elect Donald Trump to provide strategic and policy advice on economic issues.[34]

In his 2018 annual open letter to CEOs, he called for corporations to play an active role in improving the environment, working to better their communities, and increasing the diversity of their workforces.[35] This has been taken as evidence of a move by Blackrock, one of the largest public investors, to proactively enforce these targets.[36] In his 2019 open letter Fink said that companies and their CEOs must step into a leadership vacuum to tackle social and political issues when governments fail to address these issues.[37]

After the disappearance of Jamal Khashoggi, Fink in October 2018 cancelled plans to attend an investment conference in Saudi Arabia.[38]

In his 2020 annual open letter,[39] Fink announced environmental sustainability as core goal for BlackRock's future investment decisions.[40] In this letter, he explained how climate will become a driver in economics, affecting all aspects of the economy. He also divested in a separate letter (to investors) that BlackRock will be cutting ties with previous investments involving thermal coal and other investments that have a large environmental risk.[41]

Personal life[edit]

Fink has been married to his wife, Lori, since the mid-1970s. The couple own homes in Manhattan; North Salem, New York;[42] and Vail, Colorado. The couple have three children. Joshua, their eldest son, was CEO of Enso Capital, a now defunct hedge fund[43] in which Fink had a stake.[44] Fink is a lifelong supporter of the Democratic Party.[3]

Public perception[edit]

In his 2018 annual letter to shareholders, Fink stated that other companies should be aware of their impact on society, however, anti-war organizations are discontent with Fink's statement,[45] because his company, BlackRock, is the largest investor in weapon manufacturers through its U.S. Aerospace and Defense ETF.[46] In September 2018, an activist with the U.S. non-profit organization Code Pink confronted Fink on stage at the Yahoo Finance All Markets Summit.[47]

References[edit]

  1. ^ a b "BlackRock CEO Larry Fink Is Now a Billionaire". Bloomberg News. April 16, 2018. Retrieved November 27, 2018. BlackRock Chief Executive Officer Larry Fink's personal fortune has at last eclipsed $1 billion, according to the Bloomberg Billionaires Index.
  2. ^ "Profile: Laurence D. Fink". Forbes.com. Forbes.com LLC. 2010. Archived from the original on February 6, 2010. Retrieved January 26, 2010.
  3. ^ a b c d e f g h i j k Suzanna Andrews: Larry Fink's $12 Trillion Shadow, Vanity Fair, April 2010
  4. ^ "BlackRock hits record $6 trillion assets, helped by Trump tax law". Reuters. January 12, 2018. Retrieved June 12, 2020.
  5. ^ Krouse, Sarah; Tracy, Ryan (April 20, 2016). "One Firm Getting What It Wants in Washington: BlackRock". Wall Street Journal. ISSN 0099-9660. Retrieved June 12, 2020.
  6. ^ "New Report Details How BlackRock Fought Off Government Regulation by Spending Big in Washington – BlackRock Transparency Project". blackrocktransparencyproject.org. Retrieved June 12, 2020.
  7. ^ "Donor Lookup". OpenSecrets. Retrieved June 12, 2020.
  8. ^ "Laurence Fink: Executive Profile & Biography", Businessweek.
  9. ^ a b c d Davidson, Andrew; Goldsmith, Marshall (2009). 1000 CEOs. Penguin. ISBN 9780756661243.
  10. ^ Kaminer, Michael (September 3, 2010). "Jews Dominate Vanity Fair 100 Most Influential Moguls List". The Jewish Daily Forward. Israel. Retrieved September 3, 2010.
  11. ^ Roose, Kevin (2014). Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits. London, UK: John Murray (Publishers), An Hachette UK Company. p. 208. ISBN 978-1-47361-161-0.
  12. ^ "CEO Compensation: #55 Laurence D Fink". Forbes.com. Forbes.com LLC. April 22, 2009. Retrieved January 26, 2010.
  13. ^ "Profile: Laurence D. Fink (MBA '76)". Fink Center for Finance & Investments. Los Angeles: UCLA. 2010. Archived from the original on May 24, 2012. Retrieved January 26, 2010.
  14. ^ a b "Laurence Fink - News, Articles, Biography, Photos - WSJ.com", Wall Street Journal. Retrieved October 14, 2011.
  15. ^ "Corporate History". Archived from the original on May 17, 2012. Retrieved March 22, 2014.
  16. ^ "BlackRock's Big Problem | Making the climate crisis worse". BlackRocksBigProblem. Retrieved June 12, 2020.
  17. ^ "iShares U.S. Aerospace & Defense ETF | ITA". BlackRock. Retrieved June 12, 2020.
  18. ^ Andrews, Suzanna. Larry Fink’s $12 Trillion Shadow, Vanity Fair, April 2010: "There is little doubt among the financial establishment in Washington and on Wall Street that BlackRock was the best choice to handle the government’s problems."
  19. ^ Andrews, Suzanna. "Larry Fink's $12 Trillion Shadow". Vanity Fair. Retrieved June 12, 2020.
  20. ^ VerHage, Julie (January 9, 2016). "BlackRock's Fink Hoping Hillary is Ticket to Treasury Post". FOXBusiness. Retrieved June 12, 2020.
  21. ^ "The BlackRock Revolving Door – BlackRock Transparency Project". blackrocktransparencyproject.org. Retrieved June 12, 2020.
  22. ^ "The BlackRock Revolving Door – BlackRock Transparency Project". blackrocktransparencyproject.org. Retrieved June 12, 2020.
  23. ^ "The Wall Street Journal/Hay Group Survey of CEO Compensation". The Wall Street Journal. May 8, 2011. Archived from the original on October 16, 2011. Retrieved October 14, 2011.
  24. ^ BlackRock shapes shifts NYTimes, September 16, 2016
  25. ^ "About Us | BlackRock". BlackRock. Retrieved February 23, 2018.
  26. ^ "2016 ABANA Achievement Award Dinner". ABANA. Retrieved February 23, 2018.
  27. ^ "Larry Fink". Forbes. Retrieved January 15, 2019.
  28. ^ Zuckerman, Gregory; Lim, Dawn (May 10, 2020). "Big Money Managers Take Lead Role in Managing Coronavirus Stimulus". Wall Street Journal. ISSN 0099-9660. Retrieved June 12, 2020.
  29. ^ Murphy, Paul P. "Three police officers appeared to kneel on George Floyd in new video". CNN. Retrieved June 12, 2020.
  30. ^ "Color of Change Calls on Larry Fink to Stop Supporting NYC Police Foundation". Institutional Investor. Retrieved June 12, 2020.
  31. ^ "Governance". Robin Hood Foundation. Retrieved January 13, 2015.
  32. ^ The Laurence and Lori Fink Center for Finance & Investments, Los Angeles, California: UCLA Anderson School of Management, retrieved July 22, 2017
  33. ^ "Board Leadership | UCLA Anderson School of Management". anderson.ucla.edu. Retrieved January 15, 2019.
  34. ^ Bryan, Bob (December 2, 2016). "Trump is forming an economic advisory team with the CEOs of Disney, General Motors, JPMorgan, and more". Business Insider. Retrieved June 1, 2017.
  35. ^ "Terms and conditions". BlackRock.
  36. ^ Weinbar, Sharon. "How big money can drive diversity in venture capital – TechCrunch". techcrunch.com. Retrieved March 30, 2018.
  37. ^ Sorkin, Andrew Ross (January 17, 2019). "World's Biggest Investor Tells C.E.O.s Purpose Is the 'Animating Force' for Profits". The New York Times. ISSN 0362-4331. Retrieved January 23, 2019.
  38. ^ Merced, Michael J. de la; Sorkin, Andrew Ross (October 15, 2018). "Blackstone and BlackRock Chiefs Withdraw From Saudi Conference". The New York Times. ISSN 0362-4331. Retrieved January 18, 2019.
  39. ^ "Larry Fink's Letter to CEOs". BlackRock. Retrieved January 16, 2020.
  40. ^ Sorkin, Andrew Ross (January 14, 2020). "BlackRock C.E.O. Larry Fink: Climate Crisis Will Reshape Finance". The New York Times. ISSN 0362-4331. Retrieved January 16, 2020.
  41. ^ Nacu-Schmidt, Ami. "Media and Climate Change Observatory Monthly Summary: If you think you've heard this story before, you haven't seen anything yet - Issue 37, January 2020". scholar.colorado.edu.
  42. ^ Miles Costello: Business big shot: Larry Fink,The Times, June 8, 2009
  43. ^ Copeland, Rob (September 22, 2014). "Financial Elite's Offspring Start Their Own Hedge Funds". Wall Street Journal. ISSN 0099-9660. Retrieved January 15, 2019.
  44. ^ "A Second-Generation Fink Rises in Finance". The New York Times Company. September 8, 2008. Retrieved January 28, 2010.
  45. ^ Lindsey Rae, Gjording (January 23, 2018). "Larry Fink calls on CEOs to realize their companies' social responsibility". DW.com. Retrieved November 3, 2019.
  46. ^ "iShares U.S. Aerospace & Defense ETF". BlackRock.com. 2019. Archived from the original on November 3, 2019. Retrieved November 3, 2019.
  47. ^ English, Carleton (September 20, 2018). "Larry Fink blitzed by war protesters at conference". New York Post. Retrieved November 3, 2019.

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