BlackRock founder Larry Fink has predicted that artificial intelligence’s “transformative opportunity” could solve the productivity crisis he blames for persistently high inflation.
Speaking at BlackRock’s Investor Day, Fink said, “The collapse of productivity has become a central problem in the global economy. AI has huge potential to boost productivity and change profitability across sectors. There is a technology that can lower inflation.”
Fink repeatedly warned that higher inflation could force the Federal Reserve to raise interest rates again later this year.
Noting that he’s a fan of dystopian movies, Fink said the $9 trillion money manager would bring “healthy paranoia” and “healthy enthusiasm” to technology investments.
Meanwhile, Fink said BlackRock, the world’s largest asset manager, continues to seek acquisitions that could expand its global footprint, broaden its technology offerings and expand its presence in the private market. Stated.
“We are rethinking our business model,” said the chief executive. “BlackRock has never been afraid to make big bets. “
Fink and other executives did not address the criticism BlackRock continues to receive from US “anti-awakening” Republican politicians, but reiterated the economic opportunities the company sees from investing in the energy transition. Stated.
The group has set aggressive targets for its Aladdin Technology business and its smaller but more profitable private markets business, pledging to continue growing revenue by 5% annually.
The group has announced a deal with Avaloq, a Swiss banking software provider owned by Japan’s NEC Corporation. BlackRock will take a minority stake and tie its technology to Aladdin’s product for wealth managers.
Management also wants to capitalize on the trend among insurers, endowments and pension funds to reduce the number of managers they work with and even outsource their entire portfolios to a single firm. Since 2019, BlackRock has won 20 such “mega missions” worth at least $5 billion.
“Clients are doing more with less providers and doing more with us,” said Chief Operating Officer Rob Goldstein.
The group aims to double its private market revenue from the current $1 billion in five years. To this end, the company recently separated its private credit and multi-asset fund leadership from its traditional private equity. The company holds $320 billion in alternative assets, of which $156 billion is in the private market and the remainder is in hedge funds and liquid credit.
While critics have complained about BlackRock’s size and influence, several speakers argued that the wealth management industry remains relatively unintegrated.
“People keep thinking we are great, but we really aren’t. [of the total market]said Mark Wiedman, Head of Global Client Business.
