BlackRock — The Company That Owns You?

There’s a good chance you’ve never heard of BlackRock. Founded in only 1988 in less than 30 years this American financial firm would grow to become “the company that owns the world” managing assets worth 6,3 trillion dollars. These are assets that belong to their clients mainly the pension funds of ordinary people: Teachers, police officers, nurses, and many more.

And that’s just the beginning. Blackrock has also developed a software platform called Aladdin to perform risk analysis for its clients. It receives sensitive data from banks, insurance companies, and other important institutions. Through Aladdin, BlackRock has insights about the management of financial assets worth another 20 trillion dollars. BlackRock also has shares

and voting rights in many of the biggest European companies.

In sectors such as energy, oil and gas, transportation, food, and of course finance. The company holds public debt in the form of bonds and has real estate interests. And still there’s more. Our rock, you see, wears many hats. Aside from being an investor, it is also an auditor

and an advisor. Governments and central banks invite a Blackrock subsidiary called “Blackrock Solutions” to audit them and to provide advice about the management and rescue of banks. Yet at the same time, BlackRock is often a major shareholder in these same banks. In other words, the company often sits on both sides of the table. Blackrock Solutions gets privileged access to highly sensitive information that could be valuable to BlackRock itself. Does this constitute a conflict of interest?

“No”, says BlackRock which claims that the company has established “Chinese Walls” between its different subsidiaries. In January 2018, BlackRock’s founder and chairman Larry flinch sent a letter to all of the CEOs of the companies BlackRock is invested in asking them to do more than deliver financial performance and make a… “positive contribution to society”. So BlackRock not only owns the world… it also wants to save it? Let’s take a deep dive into the case study of BlackRock.

Who is BlackRock?

BlackRock is trusted to manage more money than any other investment manager in the world, helping millions of people and the world’s biggest institutions and governments reach their investing goals. The company has over 12,000 employees operating in 30 countries and supporting clients worldwide.

BlackRock was helping to bail out the same corporations that own some of the biggest stakes. Keep in mind though these are just the top 10 holdings of the whole list. which the Fed has published on the new york fed website includes 794 companies, so yes these are just the top 10 by holdings but there are hundreds of other companies that could be part of the fed’s portfolio as well larry thinks was the most powerful man in the post-bailout economy and now he’s arguably one of the most powerful men in the post-pandemic economy as well.

Yet despite all his considerable power the general public has practically never heard of larry flinch with BlackRock barely coming into the public eye during the recent claims that they were buying up single-family homes, that’s because larry is smart. he’s intentionally kept it that way he’s spent the last 33 years building BlackRock into the biggest asset manager in the world with over 9 trillion dollars under their management. Not billion trillion with a t today BlackRock’s clients includes the retirement account of average.

Everyday people in the form of pension funds also have sovereign wealth funds as their client’s other central banks college endowments to fortune 500 companies and millions of individual investors. they’re one of the top shareholders of many of the biggest publicly traded companies like Apple Microsoft Facebook and even other major banks like wells Fargo and chase to put their 9 trillion dollars into perspective the 300 largest pension funds. in the world only hold a collective of 6 trillion dollars vanguard the behemoth behind mutual funds and ETFs trails behind BlackRock was only 7.1 trillion under management and if you put the big three asset management firms together BlackRock.

Vanguard and state street control a collective of 15 trillion dollars roughly equivalent to nearly 70 of us’s GDP and larry finch has done all of this largely in the shadows with just a few occasional interviews and appearances on CNBC. he’s like the wizard of oz the man behind the curtain as William cohen puts it a former investment banker and author of House of cards an account of the bear Stearns collapse this is BlackRock. what some call the most influential financial institution in the world the world’s largest shadow bank and perhaps the company that owns the world when larry flinch was asked by Bloomberg.

if it’s true that he’s the most powerful man in finance the man responsible for 9 trillion tried to convince you otherwise. That quote I don’t think of myself as a powerful end quote is true does Blackrock own the world well it’s a little bit complicated. larry flinch is no doubt an accomplished man that’s pretty bold yes even a billion dollars can’t reverse a head that’s already gone bald.

some impressive stats in 2010 they was called the most influential financial institution in the

World and in 2014 they had 4 trillion under management making them the world’s biggest asset manager. for comparison the industrial and commercial banks of china only had 3 trillion at that time and as I just mentioned their assets have doubled to more than nine trillion dollars over the past seven years. it seems BlackRock has a hand in nearly everything these days they’re a top

Shareholder in some of the world’s biggest publicly traded companies, and a top shareholder of banks like Deutsche bank at 4.81 in 2020 they were approved by the Chinese government to set up a mutual fund in china. making BlackRock the first foreign asset manager to be greenlighted for this they also have shares in companies all over Europe including industries like energy oil and gas transportation food And of course finance and here’s the kicker BlackRock has what’s called circular ownership, where they own shares in companies that own shares in BlackRock not a conflict of interest so they’re everywhere because of their staggering size and power and the fact that they largely operate out of sight BlackRock has been called the world’s largest shadow bank.

The question is what makes someone build something this big larry flinch is known as the guy who always wanted more than he had friends who have called him obsessive and paranoid about maintaining control. he’s been regarded as someone who knows Marcus inside and out and understands business backward and forwards but it took him a massive 100 million loss to get to this point larry majored in political science at UCLA and got his start on wall street at age 23. having that edge in politics would later play a crucial role in him being the de facto middleman between Washington and wall street he received offers from some of the top investment banks but decided on the first Boston where he worked on structuring and trading bonds which sounds incredibly interesting he rose the ranks quickly and within a decade he became somewhat of a legend.

On wall street by helping develop the debt securitization market where loans like car loans credit card loans mortgages would be bundled together sliced into pieces and sold to other investors if this sounds familiar it’s because these are the same mortgage-backed securities that led to the 2008 meltdown but before that happened this securitization of debt was considered innovative. And it transformed the face of finance all of a sudden if you’re a giant bank or pension fund or whatever. that wants to invest in the housing market you can now invest in mortgage-backed security made up of thousands of hopefully safe loans very fit created one of the main tools that led to the meltdown and he was also the one us treasury hired to clean it up his interest in policy and strategy.

BlackRock oversees more than 21 trillion dollars worth of Assets instead of just 9 trillion and that’s just from a third of Aladdin’s 240 clients which means that one company BlackRock has an eye on the equivalent of at least 10 of all the stocks and bonds in the world. Whatever product you use there is some connection to BlackRock.

These companies invest in several other companies so you can see how deep this rabbit hole is.