BlackRock CEO Sees Budding Global Retirement Crisis

"Larry Fink sees a global retirement crisis brewing.

The 71-year-old chief executive officer of BlackRock says an aging population is stressing retirement safety nets such as Social Security, an issue that is set to worsen as medical breakthroughs like weight-loss drugs extend people's lives.

"As a society, we focus a tremendous amount of energy on helping people live longer lives. But not even a fraction of that effort is spent helping people afford those extra years," Fink wrote in his annual letter to shareholders.

BlackRock, the world's largest money manager with $10 trillion in assets, says more than half of the assets it manages are for retirement. Getting more people investing more of their assets in capital markets is key to securing comfortable retirements, Fink says.

"No other force can lift more people from poverty or improve quality of life quite like capitalism," he wrote.

Fink offered thoughts on improving retirement systems, addressing the national debt and investing in the global energy transition in a wide-ranging letter that avoided many of the subjects that have generated controversy for BlackRock in the past.

Two of the biggest economic challenges in the mid-21st century will be providing secure retirements and building the massive amount of infrastructure the world needs for digitization and energy, Fink wrote, adding that capital markets will be key to addressing both.

"In my 50 years in finance, I've never seen more demand for energy infrastructure," he wrote.

BlackRock is wagering that growing government deficits mean there is an increased need for private financing of major infrastructure projects.

The asset manager recently announced its biggest acquisition in 15 years -- a $12.5 billion deal to buy fund manager Global Infrastructure Partners -- which will greatly expand its infrastructure investing capacity.

BlackRock's colossal index-fund business makes it one of the three biggest shareholders in most large U.S. companies. It wields significant shareholder voting power as a result, though Fink's letter highlighted the firm's efforts to let its end clients choose how their shares are voted.

BlackRock launched a pilot program last month that lets individual investors holding its largest S&P 500 exchange-traded fund have a say in how their proxy votes are cast for the first time.

In past letters addressed to the CEOs of the companies BlackRock invests in, Fink pressed them to disclose more about the social and environmental effects of their businesses and warned that BlackRock may vote against boards that don't.

That landed him in hot water with critics on both sides of the political aisle.

Fink dropped the letter to chief executives last year in favor of one letter to BlackRock shareholders and scrubbed any references to politically contentious environmental, social and corporate-governance investing." [1]

This is his advertisement. More money invested into retirement funds give more power for him.

1. Business News: BlackRock CEO Sees Budding Global Retirement Crisis. Pitcher, Jack.  Wall Street Journal, Eastern edition; New York, N.Y.. 27 Mar 2024: B.3.