Laurence D. Fink: CEO put BlackRock on the map

Five years ago, financial advisers may not ever have heard of BlackRock Inc. Once known as primarily an institutional money manager, the firm has catapulted to a leadership role in the retail-funds market.

Its biggest venture came last December with the $13.5 billion acquisition of Barclays Global Investors. With that acquisition, BlackRock not only became a leader in exchange-traded funds — adding nearly $500 billion in assets — but it also became the world’s largest money manager, with $3.45 trillion in assets under management.

Today BlackRock is a major player both in the retail and institutional markets. Thirty-four percent of its business is in active strategies, 53% in passive.

“BlackRock is the first firm to conquer every dimension of asset management,” said Don Putnam, managing partner of Grail Partners LLC. “BlackRock proved to us that it’s possible to be in every product in the market.”

But while most advisers by now have heard of BlackRock, many have not heard of its chief executive. That’s because unlike many industry bigwigs, Laurence D. Fink tends to keep a low profile, observers said. “He is not an investment celebrity like Bill Gross,” said Don Phillips, head of research at Morningstar Inc. “He is more focused on running the company.”

That’s not to say that Mr. Fink doesn’t like people. In fact, his interest in the people with whom he works is a big reason why he has been successful in integrating so many companies with his firm, colleagues said.

When BlackRock bought Merrill Lynch Investment Managers in 2006, Mr. Fink made it a point to spend time with each of its senior managers and get to know them, said Robert Fairbairn, a senior managing director and head of BlackRock’s global client group.

“He really wanted to know about my history and what made me tick,” said Mr. Fairbairn, who headed MLIM’s institutional business at the time.

Mr. Fink’s interest in meeting new managers is even more surprising, given the torrid pace of BlackRock’s acquisitions. Besides MLIM and BGI, it acquired State Street Research & Management Co. in 2004 and Quellos Group LLC’s fund-of-funds business in 2007.

That pace of acquisitions also is in line with Mr. Fink’s style, people who know him said. “He is always on the go,” Mr. Fairbairn said.

He also is always able to put the big picture first and not get stuck in the weeds, and at times, that means putting the firm before himself, said Ralph Schlosstein, a co-founder and former president of BlackRock who now is CEO of Evercore Partners Inc., a boutique investment banking firm.

When BlackRock was looking at buying MLIM, it also was looking at buying Morgan Stanley’s investment management business, Mr. Schlosstein said. “We were having conversations with both firms,” he said. “In some respects, there were more opportunities for Larry at Morgan Stanley, but he saw that the Merrill deal was better for shareholders and so that is what he did.”

Some observers wonder what Mr. Fink has in mind to keep BlackRock in the lead. “Is BlackRock going to lose some of its edge?” asked Geoff Bobroff, a mutual fund consultant.

Advisers can expect more to come from BlackRock in 2011. Specifically, the firm is looking at how it can bring to advisers some of the risk management tools it offers to institutional clients.

“We have a big focus on risk management and really understanding the positions in the market and how that should influence portfolio construction,” Mr. Fairbairn said. “We do this a lot for the institutional business and we would like to do more of that for clients in the financial advisory business.”

— Jessica Toonkel