Why BlackRock founder Larry Fink is a revolutionary

by time news

Dhe man wears boring suits and rimless glasses that his optician should have advised against. He is neither particularly original nor particularly inspiring; by profession he is an asset manager. You can’t tell from the fact that the man, born in Los Angeles in 1952, now commands $ 10 trillion in fixed assets. Understatement is part of his self-marketing. And the camouflage of his power.

Rainer Hank

Freelance writer in the economy of the Frankfurter Allgemeine Sonntagszeitung.

Laurence “Larry” Fink is the name of this man. His company is called BlackRock, the world’s largest asset manager, who invests money for retirees, oligarchs and students, for sovereign wealth funds and small savers. In Germany, BlackRock became known outside the financial sector because the CDU politician Friedrich Merz worked for Fink for a while as a lobbyist. But that’s just by the way.

Fink is a revolutionary. It is thanks to him and his industry that stock saving has become attractive to everyone. It’s pretty simple too, all you need is a computer and an online financial platform. It is also cheap. I know what I’m talking about. For years my bank had sold me complicated funds that secured a wage and a living for many bank employees, while I was left with nothing.

It doesn’t work without toughness

Fink and his colleagues do not claim to beat the market with ingenious ideas. As boring as Fink looks, his trick is boring: His funds (also known as ETFs) track stock market indices (Dax, Euro Stoxx, Dow Jones). And not even that idea came from Larry Fink himself. It goes back to the economist Eugene Fama and his theory of “efficient markets”, according to which even the smartest cannot beat the market.


Image: FT

When the former head of the US Federal Reserve, Paul Volcker, scoffed in 2008 that the only recent innovation in the financial industry was the invention of the ATM, he must have overlooked the index funds, which had their origins as far back as the 1970s but did not see their breakthrough until after the turn of the millennium . Contrary to what many think, capitalism is not there for the capitalists, but for the poor whom it makes rich. The index funds prove it. With a savings plan of 100 euros a month, assets of almost 100,000 euros could be built up in thirty years.

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