If you haven’t noticed, BlackRock — yes, that BlackRock — is going unwoke. It’s also going far from broke, On The Money has learned.
Wednesday before the bell, the big-money management firm, the world largest in fact, will report both its fourth quarter earnings and those for the entire year.
Both are likely to depict that its business is running at full tilt, my sources on Wall Street tell me.
Confluence doesn’t necessarily equate concurrence, of course. But it’s remarkably obvious that at a time when BlackRock has dialed back its overt progressive posturing — leaving, as the Post reported last week, a UN-sponsored group of environmental activists — its financial performance is soaring, at least according to the Wall Street buzz.
One major reason: The heat from conservative critics for its so-called ESG investing has waned as it stepped back from being a staunch advocate of the woke investing strategy.
Red State treasurers still look at BlackRock’s CEO Larry Fink with skepticism, but these days less so, and they’ve largely stopped castigating him as a woke monster. They have also largely stopped pulling money from the firm as he stopped going all in on woke.
By focusing less on political issues and more on business, BlackRock is flourishing. Its assets under management are slated to spike to above $11.5 trillion even as recent higher interest rates will hurt its fixed income holdings.
Its earnings, analysts say, should be strong despite the rise in rates because of its diversified business. At a time when big asset managers are facing pressure from customers over fees, etc,, and facing customer outflows, BlackRock last year received a ton of new money from a wide diversity of sources, such as pension funds and individuals, sources said.
And BlackRock is killing it on crypto. Look at a list of top Bitcoin holders, and in a short period of time, BlackRock – -a symbol of so-called “trad fit” or traditional finance — is at the top, just behind the iconic Satoshi Nakamoto, and crypto exchange Binance.
As of January, it holds around 560,000 bitcoins worth around $55 billion in the most popular digital coin because it offers the most popular Bitcoin ETF. The ETF inflows have been steady, as the earnings report will demonstrate, sources said.
BlackRock declined to comment for this report because it cannot provide pre-earnings forward guidance, but my sources insist that it will be a hard-earned victory for Fink.
Yes, I know, Fink says a lot of stuff — some of which has gotten him in trouble in his advocacy of Environmental Social Governance investing. The investment style, his critics alleged, channeled progressive politics on issues like energy conservation through the investment process.
In recent years, he earned the ire of the both Red State GOP-run pension funds, and Republicans in Congress even as he won plaudits from the political left for using BlackRock’s investment might to enact social change. But with the growth of Red State populations and their pension funds, Fink’s ESG posturing was costly; assets declined around $1 trillion in 2022.
I know Fink better than his critics, and the caricature of him being an Elizabeth Warren acolyte is simply false.
Fink started BlackRock 30 years ago with zero assets and he didn’t build it to $11.5-plus trillion on left wing politics. He’s among the best risk managers on Wall Street, gleaned from years of experience trading bonds, and learning from his losses, as so many in his position haven’t, which is why at 72 he’s still kicking as CEO.
I have reported that he went too far out on the limb of ESG because of the money. He was able to get plenty of left-wing pension business in New York and California. But as far back as 2021 he sensed a problem with it and was calling for a sustainability transition or there will be less oil drilling and inflation.
He’s been moving away from ESG ever since, degrading its screens in managing non-ESG related assets. As I exclusively reported, he ditched a key UN-backed asset-management group last week dedicated to reducing carbon emissions to zero by 2050.
Now here’s something interesting: In Red-State political circles, critics of Fink may still call him. “Mr ESG.” A newer younger generation of investors call him “Mr. Bitcoin” — despite him once calling the digital token an “index of money laundering.”
He realized his mistake and launched the Bitcoin ETF almost exactly a year ago in January 2024. It’s up nearly 125% since.
So when you wake up Wednesday, I hear BlackRock will be touting its strong results. Fink, I’m sure, will be taking a victory lap on financial TV.
He should because there’s no coincidence that as he and the firm went unwoke, they moved about as far from broke as you can imagine.
Credit: Source link
