NEW YORK — One Saturday morning in March, Laurence Fink got some urgent news: Wall Street needed his help.
Fink runs BlackRock, a money management company whose name probably rings few bells outside financial circles. But on that March weekend the U.S. Federal Reserve Board, moving to defuse a crisis threatening the American financial system, began turning to BlackRock to play a crucial role in the government-brokered rescue of Bear Stearns, the faltering investment bank.
Now, under the aegis of the Fed, BlackRock is managing $30 billion of hard-to-sell assets from Bear Stearns, part of the central bank's unprecedented deal with JPMorgan Chase under which JPMorgan took control of the investment bank.
Fink, 55, is reluctant to talk about the assignment, and with good reason. If BlackRock fumbles, the Fed, and by extension American taxpayers, could lose billions.
In Washington, some question the arrangement, saying it puts taxpayers' money at too much risk. But on Wall Street, Fink's job for the Fed, along with other high-profile work, is quickly earning him a reputation as the Mr. Fix-it in the troubled credit markets. And for BlackRock, that means business - lots of it.
NEW YORK — One Saturday morning in March, Laurence Fink got some urgent news: Wall Street needed his help.
Fink runs BlackRock, a money management company whose name probably rings few bells outside financial circles. But on that March weekend the U.S. Federal Reserve Board, moving to defuse a crisis threatening the American financial system, began turning to BlackRock to play a crucial role in the government-brokered rescue of Bear Stearns, the faltering investment bank.
Now, under the aegis of the Fed, BlackRock is managing $30 billion of hard-to-sell assets from Bear Stearns, part of the central bank's unprecedented deal with JPMorgan Chase under which JPMorgan took control of the investment bank.
Fink, 55, is reluctant to talk about the assignment, and with good reason. If BlackRock fumbles, the Fed, and by extension American taxpayers, could lose billions.
In Washington, some question the arrangement, saying it puts taxpayers' money at too much risk. But on Wall Street, Fink's job for the Fed, along with other high-profile work, is quickly earning him a reputation as the Mr. Fix-it in the troubled credit markets. And for BlackRock, that means business - lots of it.
"We get called on all the time, but it's often not public," Fink said in an interview Monday in his glass-walled office in New York. BlackRock's prominence in the Bear Stearns deal was unusual. "This just happened to be more public because this was a much more dramatic episode," he said.
There is no shortage of drama these days in the credit markets, which happen to be Fink's specialty. Back in the 1980s, at First Boston, he helped pioneer mortgage securities, the kind of investments that are causing so much of the trouble now.
BlackRock's funds have largely dodged the blowup in the subprime mortgage market. So lately the firm has been counseling Florida about how its public investment fund, tainted by subprime investments, should ride out the storm. BlackRock also was among several Wall Street firms that advised the U.S. Treasury late last year on a controversial plan to shore up certain bank-affiliated investment vehicles (the initiative has since died).
Just this week, BlackRock agreed to manage risky subprime assets with a face value of $22 billion from UBS, the ailing Swiss bank. Fink has been crisscrossing the country to drum up even more business.
All this is helping to make Fink and his shareholders richer at a time that much of Wall Street is getting poorer. During the past year, as the shares of many larger, wealthier financial companies have plummeted, BlackRock's share price has soared 43 percent, closing at $212.15 Wednesday.
In the stock market, BlackRock, which Fink founded in a one-room office in 1988, is now worth about $25 billion, eclipsing the market capitalization of the venerable Lehman Brothers, which traces its history back to 1862. Fink made $26.4 million last year. But he also owns about 1.3 million BlackRock shares, a stake that is now worth $275 million.
Sitting in his office, Fink exudes the same restless energy as his traders, who hunch over computer terminals in concentric rings a few feet away. He folds his tall frame into his chair but cannot sit still. He twists this way and that, jumps up to offer a visitor chocolate candies with "BlackRock" emblazoned on the wrappers, and bellows to his assistant about his appointments.
"Most of the advancements of today are based on what we did more than 20 years ago," Fink said of his days at First Boston, where he earned the reputation as a whiz kid. But even now, two decades later, he still recalls how he ran up big losses at First Boston's bond division in 1986. That episode taught him a painful lesson, one he said Wall Street is now learning all over again: Risk management is crucial.
Fink has transformed his firm from a small bond shop into the largest publicly traded asset management company in the country. Along the way, the firm has focused ruthlessly on managing the risks it takes in the markets, BlackRock executives said.
That conservative approach appears to have paid off.
"We're paranoid and neurotic," Robert Kapito, BlackRock's president and a co-founder, said. "That's important in working with clients."
While many others on Wall Street are suffering, including BlackRock's biggest shareholder, Merrill Lynch, Fink's firm, which trades under the ticker symbol BLK, seems poised to prosper.
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