The Secret Sauce of BlackRock
"The most difficult time in the firm’s existence”
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Good morning, everyone.
I’ve moved BizStory to Substack! It should be a lot better in terms of readability and format. If you have any issues, let me know.
I went to The Bell in Charlbury this week, and am reading The Predator’s Ball - the gung-ho era of Mike Milken at Drexel Burnham Lambert. I’ve met a bunch of people who worked at Drexel, some of the stories are…insane.
This week’s newsletter includes: Larry nearly quitting BlackRock, cold emailing Bill Ackman, Blackstone hiring reporters and what you really think of conference season.
The Deal That Nearly Ended BlackRock
Larry Fink was invincible – but instead of playing it safe, he gambled everything on one deal that nearly destroyed BlackRock and ended his career…
In the early 2000s, Larry Fink was unstoppable.
BlackRock was growing fast, admired on Wall Street, and run with precision.
With a couple thousand people, Larry still knew most employees by name. But, he was about to take the biggest gamble of his career…
Merrill Lynch Investment Management came up for sale – one of the largest asset managers in the world. Winning it would catapult BlackRock into the big leagues.
Larry went all in - and got it.
But once the ink dried, the celebrations stopped cold.
Almost overnight, Blackrock’s headcount exploded from 2,000 to 16,000 people across the globe. Different cultures. Different systems. Different playbooks. The kind of complexity that crushed firms far bigger than BlackRock. For the first time since founding the company, Larry felt something unfamiliar:
Fear.
He couldn’t walk the halls of 30 offices simultaneously. He couldn’t check in with 16,000 people about their work, their families, their ambitions. It was overwhelming. He admitted: “my management behaviours had to change, or I couldn’t be CEO anymore…it was the most difficult time in the firm’s existence.”
Larry was desperate. But then - a turning point.
He recalled visiting the HQ of a well-known company. In its grand lobby, carved in marble, were their ‘10 Principles’. He read them top to bottom - and immediately realised the company didn’t live a single one.
In that moment, he realised something vital. He couldn’t be everywhere at once, so if BlackRock was going to survive, management had to lead by example. Larry became obsessed with leadership setting the right example. Do as I do. Act as I act. "That is the secret sauce of BlackRock" he said.
BlackRock survived the chaos, absorbed further acquisitions, and became one of the most successful firms in financial history.
Reflecting on the lesson that saved the company, Larry said:
“Principles shouldn’t be etched in marble – they should be lived.”
BizStory is read by 2,000+ ambitious professionals from Blackstone, BlackRock, PIMCO, Goldman Sachs, JP Morgan and Citadel .
Finance Culture
JP Morgan fired one of their exec’s after he expensed a $642 deli platter for a SuperBowl party at his house. The exec said it was a pre-approved party that included clients, and the court agreed. JPM have been ordered to pay the exec $4.25million. Ouch. Feels like there is a pre-emptive tightening of expenses going on. Email me with any examples and I’ll share anonymously next week.
British quant hedge fund manager Suneil Setiya was revealed as the buyer of the “most expensive home in the world” for £270 million. The London home is close to the Royal Hospital Chelsea, and was previously owned by property guru Nick Candy who bought it for £69 million. Snoop on the pictures here.
File under ‘trend no-one is talking about but should be’: big investors hiring reporters and presenters. In March, Blackstone hired ex-CNBC anchor Courtney Reagan to translate “complex market themes into clear takeaways for business and financial audiences”. Apollo is hiring for an Editorial Director to “run a live editorial operation”. Hiring for presenting skills is one thing, but hiring for social media distribution is the natural next step. Silicon Valley has already started doing this with ‘creator-investors’.
In addition to seemingly having his own personal Star Trek transporter given his Linkedin travel pics, Apollo’s enigmatic Torsten Slok claimed this week that there is “Zero evidence of AI-related job losses”.
A freshman from the University of Oregon created an X post on his 19th birthday begging Bill Ackman to work for him. It worked. Bill saw the post, and replied. Cold outreach in finance is enormously underrated. When I finished university, I cold emailed 200 people to get a job as an equity broker. Ain’t no shame in the cold outreach game.
A bunch of finance conferences coming up that you may be thinking about - SuperReturn, FII Europe, Global ABS, FT Bond Summit. Why do you attend these? Vote below and I’ll share results next week.
Want to share something anonymously that the BizStory community would find interesting? Respond to this email.
Recommendations
Larry gave a little heard 30min interview with the BBC earlier this year that is worth a listen.
Check out my video below on the story of Paul Singers investment into Argentina in 2001, leading to one of the craziest scenario’s in financial history.
Paul Singer Annexed An Argentinian Warship
Paul Singer lent Argentina money, but the country immediately collapsed. So he took one of their warships hostage to get his money back…
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Joseph Cass