Today “Larry” is the undisputed king of Wall Street. To put this in context, it is roughly equivalent to the entire global hedge fund, private equity and venture capital industries combined, and has catapulted Fink, now 68, from being a highly regarded finance industry chieftain into the rarefied ranks of corporate executives referred to by their first name. By the end of the year, it is likely to have vaulted over that level. Assuming its recent pace of growth has continued, BlackRock could reveal in its third-quarter results on October 13 that the number has crossed the $10tn mark. ![]() This feature appears in the October 9/10 edition of the FT Weekend Magazineīy the end of June this year, BlackRock was managing a whopping $9.5tn in assets, a number that would be barely comprehensible to most of the 35 million Americans whose retirement funds were managed by the company in 2020. And its technology platform Aladdin provides essential wiring for swaths of the global investment industry. It is also one of the biggest lenders to companies and governments around the world. Today, it is one of the biggest shareholders in virtually every major company in America - and quite a few internationally as well. BlackRock has become the largest asset manager on the planet, investing money for everyone from pensioners to wealthy oligarchs and sovereign wealth funds. Two months later, the deal - worth $13.5bn at the time - was sealed and announced to the world.ĭespite some early strife, it has proved phenomenally successful. He agreed to bring his boss John Varley to visit Kapito and BlackRock’s chief executive, Larry Fink, the next day. In fact, he had already received board approval to explore the sale of the entire business, and thought BlackRock was a natural buyer. “That’s a very intriguing idea,” Diamond replied. ![]() That way, Barclays would get the capital it needed to avoid a bailout and still enjoy an interest in its money management arm through a substantial block of ownership in BlackRock, which would be transformed into a giant of the investing world. Instead of selling iShares to CVC, Barclays should sell all of BGI to BlackRock, said Kapito, in return for a big slug of money and stock in the combined company. Both were members of the group of executives picked by Fink and Ralph Schlosstein in 1998 to help them create the new investment firm that became BlackRock © Mark Peterson/Redux/eyevine Fink (centre) with Susan Wagner and Robert Kapito in 2009. “Do you want to play checkers, or do you want to play chess?” BlackRock’s president asked Diamond, and presented his proposal. Diamond agreed, and the two went for a walk. He rushed up to Barclays’ corporate box, knocked on the door and asked Diamond to come out for a chat. ![]() The Yankees lost to Cleveland that night, but Kapito missed the entire game. This gave BlackRock an opening - but one it had to seize quickly. Crucially, the agreement included a 45-day “go-shop” provision, which permitted Barclays to talk to other people who might be interested in topping CVC’s offer. In early April, Barclays accepted a $4.2bn offer from CVC, a London-based private equity firm, for BGI’s rapidly growing exchange-traded fund (ETF) unit, iShares. It was even willing to sell it off piecemeal. That meant it was open to selling the family silver, including its pioneering asset management arm Barclays Global Investors. By early 2009, Barclays was scrambling to raise money and avoid a UK government bailout. So he scalped a ticket and made his way to the Bronx.īarclays had taken a plunge by acquiring the US parts of Lehman Brothers when the investment bank imploded in 2008, but the deal quickly became a deadweight dragging the British bank down as well. Bob Diamond, the chief executive of Barclays Capital, was watching the game from his corporate box at the stadium, and Kapito needed an urgent, discreet chat with his old friend. Kapito was on a secret mission that would not only transform the fortunes of his employer, the investment group BlackRock, but change the face of the financial industry. But the balding former bond trader was not there to watch a game of baseball. The economy was in a shambles, after the US mortgage crisis had rocked the global financial system, and many Wall Streeters were desperate for distractions. ![]() On April 16 2009, Rob Kapito went to the newly built Yankee Stadium, where the pride of New York was taking on the Cleveland Indians. Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |