How do top financial executives like Larry Fink have less net worth than Warren Buffet, Charlie Munger, and even less than people like Elon Musk or Jeff Bezos ?
BlackRock is the world's largest asset manager, with US$9.46 trillion in assets under management as of 2021.BlackRock was founded in 1988 by Larry Fink, Robert S. Kapito etc..... Larry Fink is the chairman and CEO of BlackRock for more than 30 years, and his net-worth is 1.1B$. How is that even possible ? This guy is managing the worlds biggest asset manager for more than three decades, but his net worth is 1.1B$, even if the numbers are wrong, at least his net worth should be in 11-12 digits.
Even the CEO of Vanguard, Mortimer J. Buckley makes less than 5.000.000$ per year.
When I look at the top executives of top financial firms/institutions, so many things seems off about their salaries and net worths. There should be something secret/shady about their net worth and salaries. There is no way that I will believe these guys make millions in a year instead of billions.
Largely on ownership + margin.
To scale a PE firm, HF, asset manager, etc... you need to give away a lot of equity most of the time as it's a people heavy business.
Not the same with some of these other companies.
Equity ownership is very important. Non-founder C-level execs running $200m/yr businesses often make less than the founder of a co doing only $10m - $20m a year.
Other big problem, a lot of PE firms trade badly when public.
Just because BlackRock has that large AUM doesn't mean it's Fink's. Plus there's plenty to the secrecy side of things that I get into below that probably applies here.
Buckley makes "so little" (I know, poor guy. Only $5mm/yr?) because the entire principle of Vanguard is low fees/overhead and they believe in that from the top down. So if anything, just shows stronger ethics and consistency to me. But again, that's what we know about. Secrecy is most likely at it again.
As far as secrecy, you better believe there's a lot of that going on. Who's not to say that any one of them spun off a charitable fund or hoard of hard assets that they happen to be the sole trustee of that's legally entirely separate from them so it doesn't count towards personal NW? If I was in their kind of position, I'd be hiding as much of my s*it as I could too (legally!). The subplots on Law & Order of all the assets being titled under the wife's name in order to shuffle them off the board didn't just materialize out of thin air.
Look at the fees you're paying on one of Fink's ETF's or Mutual funds.
His SPY ETF has a expense ratio of just 0.03%. Meanwhile the typical hedge fund charges 2% as well as 20% on all new wealth. This is why so many people are switching to passively managed funds, in fact Vanguard, BlackRock, and State Street own something like 30% of US securities. (I think it could lead to disaster as investments are spread around the S&P or the DOW, with no attention paid toward whether the individual companies are doing good or bad)
So basically you're paying Warren Buffett for his legendary investing skills, while you're paying Larry Fink to put a little of your money in each of the companies in the S&P. One service is worth a lot less than the other.
Howard Marks addressed this in one of his memos last year I believe, I don't remember which one though but it certainly does create less efficient markets and more possibilities for finding good opportunities.
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