BlackRock, the world’s largest investment manager, has become an increasingly influential Wall Street player in Washington, DC. The firm has hired notable policy-makers over the years, and at least three leaders with the New York-based asset manager on their resumes now hold prominent roles in President Joe Biden’s cabinet.
Former BlackRock investment executive Brian Deese leads Biden’s National Economic Council, effectively serving as his top advisor on economic matters. Biden also tapped Adewale “Wally” Adeyemo, a former chief of staff to BlackRock chief executive and longtime Democrat Larry Fink, to serve as a top official at the Treasury Department.
Meanwhile Michael Pyle, BlackRock’s former global chief investment strategist who had worked in the Obama administration before joining the firm, serves as chief economic advisor to Vice President Kamala Harris.
But unlike Goldman Sachs, a household brand name synonymous with executives leaving finance to go shape public policy, BlackRock isn’t as well-known to people outside the investment industry.
Here’s a few facts to know about the firm.
1. BlackRock oversees $10 trillion, making it the largest money manager in the world.
As of December 2021, BlackRock manages a staggering $10 trillion of other people’s money. That’s more than the gross domestic product of every country in the world, except for the US and China.
For its largesse in investment management, it’s a new firm by Wall Street institution standards. BlackRock was founded in 1988 by Fink, who also serves as the chairman, and seven others, including BlackRock President Robert Kapito and senior advisor Barbara Novick.
BlackRock’s makes most of its money handling investments for outside clients, mostly institutions like public pension plans, endowments, and foundations.
Nearly 60% of its overall assets under management are for institutional investors, most of which are products linked to stock markets. It also has a sprawling alternative investments business that oversaw some $265 billion in assets under management as of December, managing products across private equity, private credit, and hedge funds.
2. It runs a massive technology platform that oversees at least $21.6 trillion in assets.
In 1999, BlackRock started selling Aladdin, which analyses and tracks investors’ portfolios and can help professional money managers spot risks. Today, it is a juggernaut widely used in the money management industry and beyond.
One of the definitive descriptions of Aladdin and all its connections, a February 2020 report in the Financial Times, detailed its sheer scale:
“Vanguard and State Street Global Advisors, the largest fund managers after BlackRock, are users, as are half the top 10 insurers by assets, as well as Japan’s $1.5tn government pension fund, the world’s largest. Apple, Microsoft, and Google’s parent firm, Alphabet — the three biggest US public companies — all rely on the system to steward hundreds of billions of dollars in their corporate treasury investment portfolios.”
The report found some $21.6 trillion in assets sat on the platform from just a third of its 240 clients, the FT reported, citing public documents verified with the companies and first-hand accounts. Firms try to replicate it as a product, but none have been able to do so at the same scale.
3. BlackRock has hired many former government officials into senior roles.
By the time Deese and Adeyemo got to BlackRock, they already had experience working in government. Deese was previously a senior advisor to President Barack Obama and served as deputy director of the National Economic Council, which he is now set to lead under Biden.
Adeyemo, who was appointed as deputy Treasury secretary in the Biden administration, had previously worked as Obama’s senior international economics advisor. While at BlackRock, one of his roles was Fink’s interim chief of staff.
Pyle, who has worked as BlackRock’s global chief investment strategist, had also previously worked in Obama’s administration by the time he started at the asset manager.
4. The firm played a significant role in aiding the Federal Reserve in early 2020.
The FMA unit, which is effectively BlackRock’s consulting arm, separate from its investment management operations, had a significant role to play in the US government’s coronavirus pandemic response.
In March 2020, the Federal Reserve picked FMA to handle an emergency asset-purchasing program. There was no process where other asset managers could have bid for the job, according to a Wall Street Journal report.
After an analyst said on an April earnings call that investors viewed BlackRock’s mandate as a “bailout” for his firm or the exchange-traded fund industry broadly, Fink called the question “insulting.”
5. The Federal Reserve tapped BlackRock during the last financial crisis, too.
The investment manager had been there before, defending its connection to the Federal Reserve. During the global financial crisis of 2007-2009, the Federal Reserve Bank of New York asked BlackRock’s FMA division to handle assets of Bear Stearns and AIG, both on the verge of collapsing.
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