BlackRock CEO Larry Fink wants to be his firm to be the foundation.
The world’s largest manager is already interwoven throughout the asset management industry thanks to its Aladdin risk software and has led the way in the passive-investing revolution with its iShares franchise.
Now, the next “transformational” moment for BlackRock will be building the necessary foundation for other companies to transform their businesses. The $10.5 trillion asset manager is zeroing in on infrastructure, and Fink said on the firm’s first-quarter earnings call Friday that he believes the $12.5 billion deal for Global Infrastructure Partners will have the same impact on his firm as the acquisition of the iShares franchise from Barclays was 15 years ago.
One of the biggest reasons Fink is all-in on being the go-to capital supplier for construction companies and growing countries is the incoming artificial intelligence revolution, which has already begun to benefit his firm. He said the manager has $2 trillion more assets than it did two years ago but roughly the same head count because of the productivity gains from technology advances, including AI.
On the infrastructure front, he envisions being the capital for new data centers and power generation facilities that will be in demand by AI-driven companies.
“If you overlay what infrastructure can do related to the buildout of power with all the AI promise and the need for data centers — the need for power is going to be extraordinary,” he said on the call. “All of this is going to lead to much bigger opportunities.”
Priority number one for the firm right now is closing the deal, which executives hope will happen in the third quarter of this year, barring any regulatory fight.
Once GIP is in the fold, Fink and other BlackRock leaders plan to embark on an ambitious fundraising push for its private market infrastructure business. Fink spoke of getting products on retail and retirement platforms in Europe, and a recent $600 million partnership between BlackRock and Santander has the firm providing financing for telecom, power, and energy projects.
“Demand for all forms of infrastructure is surging around the world from telecom networks to power generation to transport hubs for data centers and new ways of securing energy,” Fink said this expansion is BlackRock’s way of taking advantage of the macro moment.