BLACKROCK chief executive Larry Fink said he is open to more acquisitions, as the world’s largest asset manager increasingly seeks to position itself as a one-stop shop for investors.

“I do see some very large opportunities for inorganic growth,” Fink told Bloomberg Television’s Dani Burger at the Berlin Global Dialogue forum on Friday (Sep 29). 

The co-founder of the firm was responding to a question on whether he would consider an acquisition as transformative as the US$15.2 billion purchase of Barclays Global Investors (BGI) in 2009. That blockbuster deal added BGI’s IShares exchange-traded funds and quantitative strategies, turning BlackRock into the world’s biggest fund manager.

After dominating stocks and debt investing for years, BlackRock – which now oversees US$9.4 trillion –  has been offering not only listed equity and bond funds, but also private-asset strategies as well as tech, data, analytics and financial markets advice to clients. As part of the alternatives strategy, it announced the purchase of London-based private debt manager Kreos Capital this year.

BlackRock is in the midst of an aggressive push into alternatives, building out its private markets business. In 2019, it bought eFront, a French software provider, for US$1.3 billion in cash to expand private equity and real estate analytics for clients, adding to its risk management technology platform Aladdin.

Private money has a crucial role to play as most democracies grapple with elevated fiscal deficits and hit the threshold of excess debt, Fink said. While warning of a crisis, he said the only solution is to re-orient and re-imagine how their growth is financed.

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“The way we’re going to be able to finance growth is public to private,” he said. “There’s so much private money looking for great long-term investments.”

Structural inflation

Speaking at the Berlin event, he said he expects 10-year borrowing costs to stay at 5 per cent or higher because of embedded inflation, adding that investors are underestimating how the changes in geopolitics are structurally inflationary. The fragmentation of supply chains means higher wages in the long run, he said.

“Business leaders and politicians are not providing the foundation to help explain this,” he said. “We have not seen inflation like this in over 30 years.”

All of this means that businesses will be moving more aggressively toward technology in pursuit of productivity, whether if it is by using more robotics or artificial intelligence, he said. However, AI could hurt some of the fastest-growing economies the most because they will see the greatest number of job losses, he added.

Fink said he has been telling every political and business leader he meets that they need to help create more “certainty” and “hope”, but what he sees instead is “fear”, citing the example of a surge in the savings rate in China.  

“In my mind, when we see savings rates decline and they’re consuming more, that’s an indication of more hope.”

Some economies are likely to enter recession early, with the US maybe seeing one by 2025, he said without elaborating.

“Whatever recessions we’re going to have are going to be modest, so I’m not that fearful.” BLOOMBERG