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The BlackRock juggernaut at the heart of the controversy - France 24

2020-01-03T07:07:25.212Z

The BlackRock juggernaut at the heart of the controversy



New York (AFP)

BlackRock, considered the largest independent asset manager in the world, has experienced exponential growth since its creation in 1988, which accelerated with the financial crisis of 2008.

Since the appointment on Wednesday of the boss of his French branch to the rank of officer of the Legion of Honor, the group is at the heart of a controversy in France, opponents of the pension reform accusing BlackRock of having wanted the influence to his advantage.

- Who is BlackRock? -

This New York-based financial monster is considered the largest asset manager - stocks or bonds for example - in the world, and manages the investments of its clients, who are both individuals and institutions: unions, public institutions , sovereign wealth funds, banks ...

BlackRock is also a very important player in the management of the money of certain pension funds.

At the end of September, BlackRock was in charge of managing around 7,000 billion dollars and had around 16,100 employees in more than 30 countries.

Its success is mainly due to the products it markets, which are inexpensive and easy to access.

- How the group grew -

Created by its current managing director, Larry Fink, with colleagues from the former investment bank First Boston, BlackRock originally belonged to the Blackstone Group.

Blackstone sold its part in BlackRock to the PNC bank in 1996 for 240 million dollars, after differences between Larry Fink and the CEO of Blackstone Stephen Schwarzman. He has since felt that this sale was his worst professional decision.

BlackRock went public in 1999, and finished that year with $ 165 billion in asset management.

The acquisitions played a key role in its meteoric growth, notably the takeover of Merrill Lynch Investment Management in 2006 for more than $ 9 billion, and that of Barclays Global Investors for $ 13.5 billion in 2009, while the British group faltered because of the financial crisis.

- How BlackRock earns money -

BlackRock charges its clients a percentage of assets under management and, in some cases, performance fees, and provides business and technology services.

The group's growth is linked to its ability to attract customers through innovative investment vehicles.

In 2018, BlackRock made a profit of $ 4.3 billion and a turnover of $ 14.2 billion. About two thirds of the assets managed by the group are located on the American continent.

- Larry Fink -

Larry Fink is certainly not as well known to the general public as other CEOs in the banking world, but he is considered one of the main personalities in the world of finance.

During the 2008 financial crisis, he would have advised both the CEOs of the largest banks, but also the US Secretary of State for the Treasury and the American Central Bank (Fed).

Vanity Fair described him in 2010 as "the main player in Washington's bailout of Wall Street", monitoring toxic assets over which the government had taken control.

His frankness was noticed, especially when in 2015 he criticized the "short-termism" of investments on Wall Street in a widely distributed letter to CEOs, urging companies to focus on long-term growth and not not give in to pressure from investors.

More recently, BlackRock called for stronger action on guns after mass killings in the United States, and unveiled investment products negotiated in 2018 that exclude gun manufacturers and sellers.

The group has been preparing since last year for the succession of Larry Fink, 67 years old.

© 2020 AFP

Source: france24

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