On Wall Street, Laurence D. Fink is an insider’s insider, the guy firms and countries go to when they’re in a jam.
Fink, the CEO of BlackRock Capital Inc., an asset-management firm, has been especially busy for the last two years, given the worldwide financial crisis.
He speaks often with Treasury Secretary Timothy F. Geithner, The Wall Street Journal reports, and he also talks with Rahm Emanuel, the White House chief of staff.
Laurence Fink
Before the change in presidential administrations, Fink and BlackRock had a role in sorting out the Bear Stearns collapse and they advised AIG when that company ran aground.
BlackRock also played a part in assessing the condition of mortgage giants Freddie Mac and Fannie Mae.
And now it may be in the potentially lucrative position of profiting from the federal toxic asset plan it helped devise, as it is on the short list of firms that may be named by the government as buyers of these assets.
“BlackRock’s multiple hats put it in the enviable position of having influence on setting the prices of both the assets it is buying and selling,” wrote the Journal this week.
Fink and BlackRock say that the company hasn’t profited from any insider knowledge, as the BlackRock group that advises the government don’t share information with the group that buys and sells assets.
“We have a two-decade record of managing conflicts, which is why we have been hired by many global institutions and government,” Fink told the Journal. “Our clients trust us.”
A graduate of UCLA’s business school, Fink, 56, began his career at First Boston in 1976, where he was one of the first traders in mortgage-backed securities in the U.S.
In 1988, Fink and three partners started the Blackstone Financial Management group within the Blackstone Group, a private equity firm founded by Peter G. Peterson and Stephen A. Schwarzman.
In 1992, Blackstone Financial broke off from Blackstone Group and became BlackRock Capital. In 1995, BlackRock merged with PNC Financial Services Group.
Later, Merrill Lynch & Co. Inc. acquired a stake in BlackRock. That holding shifted to Bank of America last year.
The bank has a 47.4 percent equity ownership in BlackRock, which has assets of $1.28 trillion as of March 31.
Over the years, Fink has been mentioned as a likely choice to lead some major financial houses, including Merrill Lynch in 2007.
That job, instead, went to John A. Thain, the CEO of the New York Stock Exchange.
Fink may have won by losing in this case, as Merrill proved to be in trouble.
While Thain did manage to sell the company to Bank of America, he was eventually forced to resign his position because of controversies over bonuses paid to Merrill employees and other matters.
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