How BlackRock manages $10 trillion

Larry Fink may not have the name recognition of Warren Buffett, but as the co-founder and CEO of BlackRock he controls over $10 trillion in assets—more than the GDP of every country except the U.S. and China.

BlackRock has become the largest asset manager in the world, and this week we explore how Larry Fink built it into a firm managing over $10 trillion:

• 📉 The investment that lost him his job

• ♠️ From failure to creating BlackRock

• 🏛️ Managing over $10 trillion

— Investor Briefcase Team

Larry Fink’s career began in the suburban neighbourhood of Van Nuys, California, where he was born in 1952. After studying political science and earning an MBA in real estate at UCLA, Fink took his first major step into finance by joining First Boston in 1976. There, he became a key figure in creating the mortgage-backed securities market. This innovation allowed banks to bundle home loans into tradeable securities, opening a floodgate of new capital for banks and reshaping the housing finance industry.

However, his early success was overshadowed by a career-defining failure. In 1986, a miscalculation in interest rate predictions caused his team to lose $90 million, damaging his reputation and prompting a reassessment of his approach to investing.

The massive loss led to his departure from First Boston. While some reports suggest that his exit was effectively forced, Fink has maintained that he was not fired. This setback would later become the bedrock of his focus on risk management—a principle that underpins every decision at BlackRock.

The end of his tenure at First Boston marked a turning point. Two years after leaving the firm, Fink co-founded BlackRock in 1988 with seven other partners and $5 million in seed funding from Blackstone Group.

Blackstone CEO Stephen Schwarzman approached Fink to launch a fixed-income asset management division, recognizing growing institutional demand for stable, professionally managed bond portfolios. Fink’s expertise in structured finance and his reputation for innovating mortgage-backed securities made him an ideal choice despite his failure at First Boston.

His new strategy with BlackRock focused on discipline—targeting opportunities with predictable cash flows and avoiding speculative bets. With this the division achieved quick success, securing General Electric’s pension fund as one of its first major clients.

BlackRock delivered consistent returns through transparent risk management and meticulous market analysis. This reliability drew more institutional investors, including pension funds and insurers, looking for stability.

Leveraging its early client base and delivering strong performance, BlackRock had grown its assets under management to $20 billion by 1994. The division outpaced its role within Blackstone, prompting a split that allowed BlackRock to operate independently.

Independent from its ties to Blackstone, Fink expanded the firm into equities and alternative investments, setting the stage for BlackRock to become the world’s largest asset manager.

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After the split, BlackRock rapidly expanded beyond fixed-income investments, growing its assets under management to $1.3 trillion by 2008. The financial crisis became a defining moment for the firm. While many struggled, Fink’s reputation as a risk expert made the U.S. government rely on the firm to manage distressed assets from Bear Stearns and AIG, giving it the status of being a stabilizing force in finance.

In 2009, BlackRock’s $13.5 billion acquisition of Barclays Global Investors, including the iShares ETF business, doubled BlackRock’s assets. BlackRock became a leader in creating and innovating ETFs which have become a modern risk-averse investment for both private and institutional investors. By 2010, BlackRock became the world’s largest asset manager, with more than $3 trillion under management.

BlackRock now has over $10 trillion in assets under management, making it the largest and most influential asset manager in the world. From a $90 million loss to overseeing $10 trillion in assets, Larry Fink’s leadership has turned BlackRock into the investment firm that is shaping the future of investing.

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