Billionaire Larry Fink Believes Infrastructure Will Lift The Global Economy

BlackRock, Inc. BLK is one of the most essential forerunners in the global asset space. When its billionaire CEO Larry Fink speaks, his insights often have greater application to the overall investing landscape. 

Bloomberg's Francine Lacqua spoke with Fink at the Berlin Global Dialogue 2024 event on Oct. 1, BlackRock's 25th anniversary on the stock market. Fink pointed out that BlackRock stock has risen by 11,000% over that time, which he said is "actually 20 times greater than the S&P 500."

When asked to forecast what the next several years may bring, Fink said he sees an overall movement toward capital markets. "A great economy has a strong capital market and banking system." Fink attributed the growth of the U.S. economy to the expansion of its capital markets over the past 25 years.

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 On Oct. 1, BlackRock closed its acquisition of Global Infrastructure Partners (GIP). Fink sees massive opportunities for infrastructure across the equity, debt and solutions markets. GIP currently has approximately $170 billion in assets under management. The portfolio includes more than 300 active investments across over 100 countries. 

He also highlighted the company's announcement of a partnership with Microsoft MSFT and Nvidia NVDA to create a new $30 billion fund, the Global AI Infrastructure Investment Partnership (GAIIP). The fund will invest in power infrastructure and data centers and plans to raise between $100 billion and $120 billion in debt. 

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Fink sees inadequacies in almost every country regarding infrastructure. He believes that focusing on infrastructure is a major component of stimulating growth worldwide. BlackRock is the world's largest retirement investor and Fink said that BlackRock's job is to find investments on behalf of its retirees that deliver safe outcomes over a long period. Data centers represent this type of opportunity because they can deliver stable returns for 15 to 20 years. 

"There's Nothing Systemic About It" 

Fink is not concerned about the current state of commercial real estate. He sees less systemic risk in the overall market than in the past. Money is always in motion. "You may lose money on one building, but you’re moving into other destinations, like data centers," he added. He noted that you can't fight demographics. Some cities are shrinking while others are growing and commercial real estate in declining areas is a concern. Overall, however, his impression is that the risk is relatively contained.

Regarding the U.S. Presidential election, Fink stated BlackRock is apolitical and wants to work with governments on infrastructure. He said he's less focused on the day-to-day and stressed that his and BlackRock's belief is centered on the U.S. being a great place to invest. Despite ongoing geopolitical turmoil, he said that he doesn't see anything that will disrupt global momentum. "The amount of trillions of dollars that are going to be necessary for infrastructure investing is going to be vital to uplift the economies worldwide."

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