What’s worth your time when you’ve already built the world’s largest asset management company?
For Larry Fink, chief executive officer of BlackRock Inc., courting the billions of dollars in assets up for grabs in Saudi Arabia is part of the answer. His Gulfstream jet lands in Riyadh several times a year, and he’s had at least two private dinners with de facto ruler Crown Prince Mohammed bin Salman, according to a person with knowledge of the matter. Meanwhile, BlackRock has been quietly increasing its presence in the country: It was the first major global investment manager to open an office in Riyadh, and the company now employs about 20 people there, a larger local workforce than its competition. The CEO of state-owned oil giant Saudi Aramco, Amin Hassan Ali Nasser, joined BlackRock’s board last year.
Saudi Arabia is a small part of BlackRock’s portfolio. The company oversees more than $10 trillion around the globe and has $100 billion-plus across the Middle East and Africa—suggesting that less than 1% comes from the kingdom. (The total market for asset management in the broad region is about $1.6 trillion, according to Boston Consulting Group.) Doing business there courts controversy because of the regime’s human-rights record and the economy’s dependence on oil—Fink for many years has spoken of the need for companies to pay attention to the risks from climate change. And the wider Middle East, as events this past weekend show, remains a volatile, unpredictable place.
Yet, BlackRock has made it a priority to grow in the kingdom, say people familiar with the company’s plans. Fink is an aggressive dealmaker who takes evident relish in his role as a kind of statesman for US-style investor capitalism, and he’s been building relationships in the region for years. BlackRock sees an opportunity in Saudi Arabia to be influential in shaping its fledgling markets and connecting the geopolitically important country with the rest of the world. And the kingdom fits with Fink’s strategic goal of expanding the index fund giant’s footprint in the more profitable business of private asset and infrastructure investing.
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