BlackRock’s Fink engineers biggest deal of career
BOSTON (Reuters) – In the rarefied circles of institutional investors and government officials asking for investment aid, Laurence Fink is known as the go-to man.
Now he may become that to average savers around the world.
As chief executive of BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz), already the largest publicly traded U.S. asset manager, Fink this week engineered a blockbuster deal to buy Barclays Plc’s investment unit BGI. Together they will become world’s biggest money manager with roughly $2.8 trillion of assets.
To analysts and investors the move is typical Fink — a carefully considered deal with a hefty price tag designed to add critical mass, access new products and bring in the retail clients BlackRock has long wanted to attract.
And one the California native, known for keeping top talent happy, is expected to execute on time.
“There is potential there for BlackRock to pull this one off,” said Michael Herbst, a mutual fund industry analyst at research firm Morningstar Inc.
Since 1988 when Fink co-founded BlackRock as a one-room fixed income shop, he has proven his hand at orchestrating a string of acquisitions, including a $8.6 billion deal to buy Merrill Lynch Investment Managers in 2006.
Before that he bought Boston-based State Street Research & Management and after that purchased the funds-of-funds business from Quellos Group.
Fink, who has deep roots in the mortgage markets, has worked hard to diversify BlackRock’s capabilities and make it more than a bond manager locked in a deep rivalry with West Coast competitor PIMCO.
And when Washington needs a trusted player on Wall Street to help calm markets during the financial crisis, BlackRock often gets a call, insiders at the company have said.
The company applied to become one of the Treasury Department’s hand-picked managers assigned to buy toxic assets from banks as part of its Public-Private Investment Program.
The lanky executive is not well-recognized by the public and can walk through midtown Manhattan without creating a stir. Unlike other bank chief executives, Fink is no danger of being pelted with expletives, largely because his company rode out the financial crisis with relative ease.
Since January, BlackRock has returned 36.12 percent, ranking among the best performers in the industry.
Two years ago Fink was in the running to take the helm of Merrill Lynch but was not offered the job after he began asking to tear into the company’s financial documents more deeply, people familiar with the search said.
Merrill Lynch was acquired by Bank of America last year and John Thain, who beat Fink to the position, is out of a job.
Fink apologized to shareholders for any unrest the talk of his leaving might have caused and has been fully devoted to BlackRock ever since.
Famous for the long hours he keeps, Fink is also known for navigating turbulent markets, wooing and keeping top talent, and speaking plainly about all types of topics, according to people who work with him and know him.
The 56 year old is also known to be both diplomatic and plain-spoken. He helped persuade embattled former New York Stock Exchange Chairman Dick Grasso to step down and helped find John Thain to take the top job.
Fink, who traditionally wears a tie to work even as he encourages other BlackRock employees to sport more casual wear, is usually at his midtown Manhattan office by 6 a.m.
He sticks to a grueling but predictable schedule that includes lunch at a favorite Italian restaurant near the office and lots of overseas travel.
Over the years, Fink’s fascination with geology has become well-known on Wall Street, where he and his partners stuck to the rock theme in naming their company, as well as products like the Obsidian and Galaxite hedge funds.
Even in his free time, rocks aren’t far from Fink’s mind. People who know him say the avid outdoorsman enjoys hiking and fly-fishing in the mountainous state of Colorado.
(Editing by Steve Orlofsky)