(Bloomberg) -- Around his 71st birthday, Larry Fink began to blue-sky about the future.
What would it take, the billionaire mused with associates, to really grow the firm, to double the stock price of BlackRock Inc., the giant asset manager he has run for nearly 40 years?
Inside BlackRock, steward now of $11.6 trillion of investor money, two other questions hung in the air: How long Fink would reign at the company, and who could succeed him.
These days, those questions all point to the same answer: Larry Fink isn’t done with BlackRock yet.
Just the opposite. At 72, Chairman, Chief Executive Officer and Co-Founder Fink is in the middle of his next big act at the company he built into the world’s largest asset manager. Through almost $30 billion in acquisitions, he aims to reshape BlackRock into a dominant force in the private markets, as well as the public ones. People close to the company have privately suggested that the day when Fink steps back — a topic of speculation going back at least a decade — is now years into the future.
The past week has only underscored those thoughts. Fink acted as dealmaker-in-chief in the whirlwind negotiations that clinched BlackRock’s offer to buy more than 40 ports in 23 countries and, most importantly, those at either end of the Panama Canal. He personally talked with President Donald Trump, who wants the US to control the canal, to get it done. Trump praised the company’s deal in a prime time address to the nation.
Far from handing off, Fink is relishing his role atop BlackRock, people close to him say. He’s moving to quiet down years of criticism that the firm pushed “woke capitalism,” and he remains the most powerful elder statesman in the investment industry. He’s intent on seeing BlackRock’s recent deals through, in hopes of ensuring that the firm’s new direction is firmly on course and that his wager to reinvent BlackRock will succeed, according to people familiar with his thinking.
He’s been on a travel blitz over the past few months, visiting Prime Minister Keir Starmer in London; meeting with the ruling emir of Kuwait, Sheikh Mishaal Al-Ahmed Al-Sabah; and traveling to Australia, where he has praised the country’s pension system. On Monday, he was in Houston for an energy conference, and Wednesday he’s scheduled to be at a conference BlackRock is holding in Washington on retirement.
“Larry is working as hard as he ever has, and he will sprint to the finish line — whenever that is,” said Ralph Schlosstein, a BlackRock co-founder and chairman emeritus of Evercore Inc.
Hours after the deal was announced, Fink himself said: “I probably have more energy today than I did when I was 32.”
Changing Landscape
If Fink isn’t ready to go, potential successors face a choice. Two have already hit the exits: Salim Ramji now runs rival Vanguard Group Inc., and Mark Wiedman will leave soon. Two other BlackRock veterans, Chief Financial Officer Martin Small, 49, and Chief Operating Officer Rob Goldstein, 51, remain firmly in the picture, according to people familiar with the matter.
They face a changing landscape, as the recent deals both make the firm more complex and bring new faces into the ranks of CEO hopefuls, including Global Infrastructure Partners President Raj Rao, 53, the people say. Rao, alongside GIP Deputy Chairman Michael McGhee, played a leading role in clinching the $19 billion ports deal.
Adding to the changes atop BlackRock, the most prominent non-Fink voice on the board — and therefore on succession — is about to change. Murry Gerber, the lead independent director for the past eight years, plans to step down in the next few months, and his replacement hasn’t been announced.
A spokesperson for BlackRock declined to comment. The company said last year that it has succession plans in place for senior management and has identified internal executives for many senior roles.
“One of the challenges that a lot of these founders face is that they’re all brilliant in their own regard, but finding that next generation of leadership is always a challenge,” said Bill Katz, an analyst at Cowen Inc. who has followed BlackRock for decades and was around when the company went public in 1999. “For him to leave now, I don’t think is logical,” Katz said, but “they would do themselves some good service by getting the market more familiarized with the next generation.”
Still, Katz has a buy rating on the stock, saying the company’s execution has been strong. “Larry has done a great job of building really good businesses,” he said. “It would probably be insulting to think that they wouldn’t run OK without him.”
Fink and BlackRock have plenty of company, with firms like Berkshire Hathaway Inc., Millennium Management and JPMorgan Chase & Co. all grappling with how the future will look when their highly prominent, highly invested and often outspoken leaders are gone. BlackRock’s succession planning has taken on a new twist, however, with the recent deal blitz injecting fresh blood into the race just as other longtime contenders have bowed out.
And Fink is talking about staying on as chairman when the time comes for him to step aside as CEO. That means he could have a major say at BlackRock for years yet. No longer is he saying – as he did when he was 64 — that being chairman would be a “disaster” or “unfair” to the next CEO. “When I do believe the next generation is ready, I’m out,” Fink said in July. “I may be out as a CEO, I may stay as a chairman, but I’m not going to be a blocker.”
Fink has just kicked off BlackRock’s next chapter: one focused on growth in private markets. The three acquisitions — $12.5 billion for Global Infrastructure Partners, £2.55 billion ($3.2 billion) for Preqin Ltd. and $12 billion for HPS Investment Partners — have either closed or are in the process of closing over the first half of this year. They will leave the firm with $600 billion in alternative assets, roughly double what the firm managed at the end of 2023. Alternatives and technology revenue will account for about one-fifth of the firm’s total.
Fink sees the deals as vital to his company’s future. At the center of the logic behind them is Fink’s answer to how to grow the firm beyond its dominance of stocks and bonds, ETFs and index funds. The leading firms in private markets were getting higher market capitalizations: Blackstone Inc. was worth more with about 1/9th of the assets. Clients from insurers to pensions to family offices and potentially millions of wealthy individuals, too, were shifting to private assets, especially infrastructure and private credit. BlackRock, which spun out of Blackstone in the mid-1990s, had to make a play.
BlackRock was trading between $750 and $780 a share in late 2023 and early 2024, and Fink and senior executives were thinking about how to get to something like $1,500 a share, according to the people.
Fink deputized Small, his CFO and head of corporate strategy, to work with Rao, who is second to GIP CEO Adebayo Ogunlesi, to get the infrastructure deal done. Small then played a key role in negotiating the deal for HPS at the end of the year, and Goldstein, who oversees much of the firm’s operations and its technology business, was heavily involved in the acquisition of Preqin’s data business.
New Guard
The deals are already rippling through the top rungs of BlackRock, bringing in-house a new guard of entrepreneurs who quit Wall Street banks to found their own companies and are re-shaping the ranks of potential successors, people with knowledge of BlackRock say.
The change is playing out at the company’s top management layer: the Global Executive Committee, or the “GEC” as it’s known internally. Soon five executives from GIP and HPS will sit on the GEC with power over the new priorities at the firm — and with billions of dollars worth of BlackRock stock in their pockets to influence the whole company.
GIP CEO Ogunlesi, who with almost $2 billion in BlackRock stock is the single largest individual shareholder in the company, is on the GEC, as is Rao. The 12 million shares given to GIP’s executives in the deal will make them one of the largest forces as a voting block. They agreed to vote in line with the board.
When the HPS deal is completed, CEO Scott Kapnick and governing partners Scot French and Michael Patterson will all sit on the GEC, too. Kapnick will be worth $4.3 billion and French and Patterson will be worth $2.2 billion each thanks to the all-stock deal, according to Bloomberg News calculations. They will be in charge of running a $220 billion private credit division that’s one of Fink’s top priorities, and they, too, have been praised among the influx of talent.
For now, the job of closing the HPS and Preqin deals and for integration will fall, in part, to Small and Goldstein, who both sit on the GEC, too.
Over the past three years, Small’s prominence has risen considerably inside and outside the firm. After joining the firm in 2006, he worked on its financial markets advisory group in response to the 2008 financial crisis, and his role now includes overseeing all business in the Americas as well as remaining CFO and head of corporate strategy.
Goldstein, known as “Goldie,” oversees the day-to-day operations of the firm, as well as the company’s risk-management and technology systems that have become critical to BlackRock. Goldstein, who’s been at the firm since 1994, has been popping up more at conferences like the World Economic Forum in Davos, Switzerland, and he’ll have a hand in a new division that manages relationships with big clients like sovereign wealth funds.
“I don’t think they would want someone to succeed Larry who only had real experience and expertise in one vertical at BlackRock,” Jason Kephart, an analyst who follows BlackRock at Morningstar, said in an interview. “Martin Small, Rob Goldstein are definitely in the future plans.”
In the decade or so of succession speculation atop BlackRock, Fink has talked about preparing the next generation of talent, and recently the firm handed out long-term performance-based compensation perks. Last year, the firm gave Goldstein $8.5 million and Small $6.5 million. The extra stock options vest between 2027 and 2029. The full payouts for the new GIP and HPS executives are over several years. Fink himself was awarded additional pay perks tied to the “expansion” of his executive responsibilities related to private markets.
Whoever the next CEO of BlackRock turns out to be, they’ll need to have one quality that’s hard to quantify, Fink said recently.
“To be a leader of a company today, if you’re not a dreamer, you’re probably going to fail.”
--With assistance from Todd Gillespie.
