WHEN: Today, Wednesday, January 15, 2025
WHERE: CNBC’s “Squawk Box”
Following are excerpts from the unofficial transcript of a CNBC exclusive interview with BlackRock Chairman & CEO Larry Fink on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Wednesday, January 15. Following are links to video on CNBC.com: https://www.cnbc.com/video/2025/01/15/blackrock-ceo-larry-fink-our-job-is-to-manage-your-money-your-way.html, https://www.cnbc.com/video/2025/01/15/blackrock-ceo-larry-fink-our-penetration-with-clients-worldwide-gives-us-the-differentiating-model.html and https://www.cnbc.com/video/2025/01/15/blackrock-ceo-larry-fink-infrastructure-will-be-the-largest-growing-sector-in-private-capital.html.
All references must be sourced to CNBC.
FINK ON THE PAST YEAR
ANDREW ROSS SORKIN: I had an opportunity to sit down with BlackRock Chairman and CEO Larry Fink in exclusive interview about the results and we’re going to show you a lot of that throughout the broadcast. Take a listen to this.
LARRY FINK: Never had a year like last year in the United States. We did three remarkable mergers. We had a record amount of inflows from clients.
FINK ON MERGERS, LA WILDFIRES & HOMEOWNERS INSURANCE
SORKIN: BlackRock out with fourth quarter and four-year results this morning. The stock right now on the back of that news. Let’s show you where things stand because the world’s largest asset manager now overseeing $11.6 trillion under management beat the top and bottom lines. The stock up about a little over 2% right now in the fourth quarter. BlackRock generating $281 billion in net inflows. And I ended up speaking to BlackRock Chairman and CEO Larry Fink in an exclusive interview and asked him about the factors that appear to be driving the performance.
FINK: We announced three mergers in 2024. We spent $27 billion in acquiring these three firms. Generally, when you’re doing mergers, clients pause. They want to see what the firm looks like. They want to understand what does it mean for them. And our job is to try to tell them what everything means to them. So in the context, when we did three remarkable mergers, we had a record amount of inflows from clients. So $641 billion of net inflows, $241 billion in the last quarter. Over $360 billion just from the U.S. alone over the course of the year. Across every segment in the world, whether it’s passive, active, index, alternatives, we had really great flows. And what it translates into, clients are believing that BlackRock can help them and provide more for them.
SORKIN: OK, but what do you think you’re doing? Meaning this money is coming in at a time where it’s not being, you know, evenly dispersed to all the asset managers in the world, right?
FINK: No, but I think what’s going on in the asset management industry is true in most industries. Clients are doing business with fewer organizations. You see that in retailing. So let’s look at Walmart versus so many of their competitors. Their market share really improved over the course of the year. I think what’s going on is if you could provide more and if you have the scale of providing that with your clients, and clients will reward you with that. And I do believe our penetration with clients worldwide, from cash management to long-duration assets across the board, fixed income and equities and alternatives, really just gives us that differentiating model. Now, you know, we are the number one firm in ETS. We’re the number one firm in investment technology through Aladdin, where we had 12% organic growth in that, on top of that. We had 7% net new fee growth. So every metric, as you suggested, was a record moment for us.
SORKIN: We’re going to get into a lot of other issues, including the issues of woke and un-woke-ism and climate. We don’t get too deep on the Bitcoin topic, but we get into a whole conversation. Well, we get into the conversation of the markets, which we’re going to have to see in just a little bit. But we do get into a conversation about insurance because one of their big clients are insurance companies, as it happens.
BECKY QUICK: Insurance companies and reinsurance.
SORKIN: And reinsurance companies, exactly. And Fink, we should mention, is a native of Los Angeles. And I asked him about what he thinks of these devastating wildfires and not just the personal but also economic cost.
FINK: As a Los Angelino, it is horrible to watch. I mean, I used to hike the Santa Monica Mountains all the time. I used to. I mean it was one of my pleasures of growing up, actually looking for snakes and reptiles as a kid, walking through the chaparral. And I was there during the Great Bel Air Fire. So, you know, we’ve always had fires in Los Angeles, but you’ve never seen the destruction like this. Maybe we’re going to have to redefine, you know, event risk throughout so many parts of the country. And it’s going to be a big issue in America. You know, the role of homeowners insurance and homeowners insurance is becoming a larger and larger component for homeownership. And I think this is going to be an issue for government going forward. And, you know, I think this is going to be one of the bigger issues that are going to be tackling — that we’re going to have to be tackling over the next four years. But, you know, when you’re — when you have whole neighborhoods destroyed and you have infrastructure and schools and supermarkets destroyed, this is not a one-year fix. This is going to be five, six, seven, maybe 10 years of fixing.
FINK ON ALTERNATIVES BUSINESS, FUTURE STRATEGY & MARK WIEDMAN LEAVING BLACKROCK
SORKIN: And I spoke to BlackRock Chairman and CEO Larry Fink in an exclusive interview and asked him about the alternatives business, which is a big new priority for the firm.
FINK: It is my belief for democratic economies to continue to grow and Western economies to continue to grow, we’re going to have to rely more on the private sector. And the brilliance of the United States economy is based on the capital markets, and that’s the role of CNBC to talk about all the different things in the role of the capital markets. We have the broadest, deepest capital markets in the world, and that’s why a startup company, a small company, a medium company, a large company has access to capital like nowhere else in the world. And we underestimate the power of our global capital markets and mostly the US capital markets. It is my belief that capital markets are going to become a larger and larger economic engine here in the United States and all throughout the world. I said in the editorial that we can’t rely on deficits. I mean, we don’t talk enough about our deficits right now. And I do believe we’re going to have to rely more on the private capital, private sector. That’s what President Trump’s talking about in some of the new policies, but and we’ll see how that rolls out. So if I had a crystal ball, I would tell you right now that the sectors that are going to grow the most in the capital markets, in the private space, will be infrastructure.
SORKIN: One year ago, just this week, we should mention, BlackRock announced the acquisition of GIP. That deal closed in October. The firm has since announced two more deals to acquire Preqin and HPS. And I asked Fink, what is next on his wishlist?
FINK: Successful integration. I mean, I would tell you—
SORKIN: Are there other things you say to yourself, you know, thematically we’d like to be in?
FINK: Actually, in 2023, we did a, we called it our 2030 strategy. We said we need to get much larger in private, private market data. And we acquired Preqin. We said we need to get much larger in infrastructure. We had a growing infrastructure team. We were doing really well in it, but we’re not growing as fast as I perceive the market. We had one target, and that was GIP. And we said in the strategy session in 2023, we need to get much larger in private credit. And we had only one target, HPS. And the beauty of last year is we only had three targets and we acquired all three targets. I don’t have any new targets going forward. I can’t — and I’m not in the market right now buying more companies. We may do some minority investments, but we’re not going to be — I don’t believe you’ll see BlackRock in the market buying whole companies.
SORKIN: Also this morning, BlackRock announcing one of its top executives, Mark Wiedman, who spent more than two decades at the firm departing. Wiedman is the head of global client business and was considered a potential successor to Fink. And I asked him what the announcement means for succession plans at the firm.
FINK: Mark is a dear friend. He will remain a dear friend. I mean, he is a really true dear friend of mine. Mark came to me six months ago talking about what ifs and all that stuff. And he’s been at the firm 20 years and he said, you know what, I’m looking, I may, I’m looking for a new chapter. And over time, and it wasn’t decisive back then, but as we talked and talked and talked, it was very clear that he was going to go down a new path. I don’t believe we’ve ever had a deeper, broader bench at this firm ever. And so I’m actually smiling about the ease in which a serious leader of BlackRock chooses a new direction in his life, that I had many options. And it was, you know, we worked with the board, with the management team. And this has been a — it’s really a moment of joy, not that Mark is leaving, but he’s leaving with a hug and he’s leaving with a lot of grace. There’s a beautiful memo that’s going to be out this morning about Mark and all that and what he meant to me and what he will mean to me in the future. It means nothing, nothing. None of this was about succession.
FINK ON THE MARKETS & POLITICS
SORKIN: In an exclusive interview, I asked CEO Larry Fink about where he thinks we are in the markets right now.
FINK: I think I said last quarter that I could see a scenario where the 10-year is going to be at 5%, and so it’s getting close to there, close to 4.80. I can actually see a scenario where the 10-year is at 5.5%. I can also see a scenario where it’s going back down to, you know, back down to 4%. And so we have an incoming president who is making some broad changes to the economy, broad decisions, and we’ll see how this all plays out. And it all comes down to inflation. And there are some economists who are calling for the Fed continuing to ease three more times, and there are some people who are saying they’re going to stop, and I even heard from one or two economists, they’re going to have to start raising again. And so I don’t know truly where we are, but I could say the range of outcomes is broader than the range of options that we just thought of four months ago, and I think that’s what’s going on in the marketplace.
SORKIN: Is that similar for the equities markets, in terms of that range?
FINK: Well, a 5.5% 10-year would be harmful for growth equity.
SORKIN: Right.
FINK: And that’s what you’re starting to see. That being said, we’re going to see a lot of reports this morning related to earnings, and we’re going to have earnings for the next few weeks. My bet, earnings are going to be stronger overall. That being said, we cannot discount, and this is something that people are not focusing on, the strength of the US dollar. So let’s dissect in my earnings announcement. So I’ll talk about BlackRock. We had $281 billion of net inflows. But also, because of the dollar appreciation, we had a $200 billion revaluation because of the dollar appreciation. That’s going to play a big role in earnings in the fourth quarter, and we’ll see how these multinational companies are going to be playing it. But beyond the revaluation of the dollar that you can’t control, I do believe earnings are going to be stronger than people think because they believe the resiliency of the US economy. And I think the economy is in very good shape. That being said, is it in too good a shape? Are we going to start seeing elevated inflationary pressures? We’ll see that. We’ll know that probably by March. But the range is broader.
SORKIN: I also spoke with Larry Fink about wokeism and the politics in the moment, especially as they relate to investing. It was reported last week that BlackRock left a climate-focused group called the Net Zero Asset Managers Initiative, and BlackRock has been something of a symbol for ESG principles and a target for those that see those initiatives, if having gone too far. But I told Fink it didn’t seem like investors were punishing the company for any of those negative perceptions that may be out there, given the amount of inflows that are coming specifically in the United States, frankly, from red states, to BlackRock.
FINK: No, actually, we’re getting more checks. There’s no question we were, we’re a topic of debate from the far left and the far right. I think what’s resonating, our job is to be a fiduciary for every one client. If a client has awarded us $1,000, our client awarded us $10 billion, our job is to be doing what’s right for them. And so there are a lot of members of the far left and a lot of members of the far right would like to tell me how to manage their money. And what we’re telling everybody is our job is to manage your money your way. It’s not our money. So all $11.6 trillion that we are responsible for, not a penny of it is our money. And what it just shows, we’re doing a very good job of helping each and every one of our clients to do asset management the way they want us to do it. And, yes, there are — could we have won more business even if we were not part of a topical debate? Yes, we probably would have even won more. That being said, we never had a year like last year in the United States.
SORKIN: Do you think this ends that debate?
FINK: No, by no means. I mean, look, we’re — we are responsible for a lot of people’s money. We are a large shareholder listed on behalf of a lot of companies. And so, no, scale and size in every industry, you become a target. And that’s just a part of life in a world that is heavily oriented towards populism. But our job is to be persistent in working with each and every client. Our job is not to be working for that left-wing organization or that right-wing organization or that spokesperson from the far right and left. Our job is to be working for each and every client, and that’s resonating with our clients.
SORKIN: Real quick, just on that issue.
FINK: Yeah.
SORKIN: Will you speak to the idea of taking yourself out of the net-zero consortium?
FINK: Was I part of the conversation internally or what?
SORKIN: Yeah, just—
FINK: So many things have become politicized. We are responsible now in decarbonization and the whole investing in new technologies for energy. We’re the largest manager in the world in that. We’re winning more business than ever before in terms of decarbonization technology. We have over a trillion dollars that we’re responsible that are moving this. So those clients who are interested in new technologies or new things, they’re coming to us. At the same time, we’re the largest hydrocarbon investor in the world. We always were, and it has been contorted by many people. Today, I think it’s $181 billion we manage in hydrocarbon companies. And a little secret, even with all this debate, in the last few years, we won almost every major energy company in the United States their pension fund.
SORKIN: It’s a fascinating dynamic, given all the sort of cross-currents that have been going on, the politics of the moment and more. And Larry Fink is going to, by the way, be in Davos, Switzerland. We’re hoping to catch up with him more there as well.
For more information contact:
Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
Stephanie Hirlemann
CNBC
m: 201.397.2838
