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World’s Largest Asset Manager Is Using Your Money for Everything But Profit

April 28, 2021 By E.J. Smith

By Elnur @ Shutterstock.com

BlackRock, the world’s largest asset manager, is run by Chairman and CEO Larry Fink. Fink has decided that with the power of his position, he’s going to force companies to support his political goals. Is this really who you want running your money?

He’s acting like it’s his money, not yours. Pay attention to what’s going on here. Bloomberg‘s Erik Schatzker and Annie Massa report:

If BlackRock Inc.’s Larry Fink ever had second thoughts about injecting his voice into such weighty issues as climate change and voting rights, he doesn’t anymore.

“I’ve been very loud at what I’m saying and I’m going to be loud again,” Fink, BlackRock’s chairman and chief executive officer, said in an interview at the Bloomberg Green Summit. “Over the last rolling 12 months, we were awarded $527 billion, so our voice is resonating with our clients.”

Emboldened by the record amounts of money flowing into his firm, Fink is among the most prominent leaders in finance to embrace the ideals of stakeholder capitalism, and he’s wielded the influence that comes with overseeing $9 trillion to push others in the same direction.

In his annual letter to CEOs in January, he stressed the need for companies to respond to racial injustice, economic inequality and environmental degradation — all issues traditionally left to government.

Most recently, BlackRock, the world’s largest asset manager, and Fink himself signed a letter defending the right to vote and opposing any “measures that restrict or prevent any eligible voter from having an equal and fair opportunity to cast a ballot.” The April 14 letter followed the March passage of a Georgia law widely seen as limiting voter access in the state.

“I believe our voice is imperative in the communities where we work,” Fink said. “If you look at the companies that have voices, companies that have strong stakeholder capitalism as part of their principles, those companies are performing better than the ones who were silent.”

While Fink acknowledges that his is the “largest voice” in the asset-management industry, he’s hardly the lone CEO speaking out. The letter on voting rights was signed by hundreds of corporate leaders, including Merck & Co.’s Ken Frazier, ViacomCBS Inc.’s Shari Redstone and Michael Dell of Dell Technologies.

Corporate activism on social issues has become such a force that Senate Minority Leader Mitch McConnell, responding to the outcry over Georgia’s voter law, warned CEOs to “stay out of politics.” The Economist devoted its April 17 cover to the “Political CEO.”

So far, investors are anything but turned off by Fink’s positions: They pumped a record $171.6 billion of new money into BlackRock in the first quarter.

Tectonic Shift

Fink is positioning the firm to benefit from what he calls a “tectonic shift” to climate-sensitive investments. He said clients are reallocating capital to sustainability, and away from the economy built on fossil fuels, at a faster pace than anything he’s witnessed in 44 years on Wall Street.

Action Line: You want a fiduciary to manage your money. When Larry Fink and others use your money to achieve their goals, you invest, and they win.

If You’re Serious, Sign Up for My Email. But Only If You’re Serious.

Originally posted on Your Survival Guy.

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E.J. Smith
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@youngresearch.com

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