In this episode, Scott Becker discusses Larry Fink’s recent push for a 50/30/20 investment strategy and the potential self-interest behind BlackRock’s growing focus on alternative assets.
Chapter 1: Who is Larry Fink and why is he called Slippery Larry Fink?
This is Scott Becker with the Becker Private Equity and Business Podcast. Today's discussion is about someone that we'll call Slippery Larry Fink. So here's the deal with Larry Fink. Bear with me on this. And I know Larry Fink's an incredibly accomplished business person. He is the CEO of BlackRock and he's a billionaire and really talented.
But here's what he does that earns his nickname, the Slippery Larry Fink.
Chapter 2: What is Larry Fink's proposed 50/30/20 investment strategy?
Chapter 3: Why does Larry Fink have a self-interest in promoting alternative assets?
he's come out recently and said that investors should move from the traditional 60 40 60 stocks 40 bonds to something he calls 50 30 20 which is more 50 equities 30 bonds 20 alternative assets and the thing about larry fink is he's not wrong but one of the things that is the reality of where i think is he's also got a very strong self-interest behind everything that he does
Chapter 4: How does BlackRock compare to private equity giants like Apollo and Blackstone?
BlackRock, as you might know, is the largest money manager in the world. They're nearly as profitable traditionally, or the market cap traditionally, of some of the big private equity funds like Apollo and Blackstone and KKR that are a tenth of the size of BlackRock, but bigger market cap and higher PE ratios. So BlackRock, over the last few years,
Chapter 5: Why is BlackRock shifting focus towards alternative assets?
has tried to move more and more into what's called alternative assets. And big money managers, private equity funds, love alternative assets because rather than earning a fee of 50 basis points or 100 basis points, they earn a fee of 200 basis points plus a part of the profits. So there's a lot of self-interest in moving towards alternative assets.
And the record shows some of the alternative assets do better, some do worse. Sometimes it's worth the liquidity difference, sometimes it's not, because you give up liquidity when you go to alternative assets versus typically, traditionally, public equities, public bonds. So Larry Fink is...
BlackRock moves heavily into the alternative asset area, suddenly puts out the proclamation that investors should move from 50 to 30, 20 from 60, 40. They should move to having 20% of their holdings in alternative assets. And again, he might not be wrong. It's certainly not an appropriate move. allocation for a typical investor. It might be the right allocation for a rich, rich investor.
But the point is there's so much self-interest in it and his inability to explain the self-interest is what leads me to talk about him being called Slippery Larry Fink. Now, again, Larry Fink's fascinating because when DEI and ESG was the thing, he was Mr. DEI and ESG. When the world changed, he became Mr. Donald Trump. And again, I don't, I don't, I'm not an anti-Trump person, a pro-Trump person.
I just find it fascinating how well Larry Fink moves. He's like a cat with nine lives, a leopard that doesn't change his spots. But for this purpose, we'll call him Slippery Larry Fink. I hope somebody enjoys this podcast. I hope it resonates with some people. I find it fascinating how... You could put out things as proclamations that this is the right thing to do without explaining.
And we have this crazy self-interest in it because we're trying to move ourselves heavily into the alternative asset area. But again, I hope it resonates with people. I hope you find it interesting. My take, 773-766-5322. If you're the first person to respond to this podcast and listen to it, we will send you a $100 Amazon gift certificate.
Thank you for listening to the Becker Private Equity and Business Podcast.
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