His company, BlackRock, controls or monitors more than US$12 trillion (GIC and Temasek have, at best, an estimated US$700 billion), yet he admits he and his team made mistakes during the recent crisis.
“At the mention of these blunders*, Fink, who has been sprawled in his chair, suddenly stiffens. His voice takes on a harsh tone that is leavened only by his visible anxiety. “When you manage money, you are going to make mistakes. You are not going to be 100 percent perfect. Our job is to minimize those problems, to cauterize them,” Fink says, his voice rising. “We’re not perfect, and I’ve never said to anyone that we are going to be perfect. Our investors had all the information we did and they did their own due diligence.” He exhales deeply. “Our real-estate division is struggling because of bad performance, and we’re making changes. I don’t care if the whole industry blew up, our job is to do better than the industry, and we didn’t in real estate,” he says. “I am not making excuses. I lose sleep over these problems.” The Stuyvesant Town loss was “an embarrassment,” he says. Then his voice drops to a whisper. “I mean, my mother gets her pension from calpers.””
If you want to know about one of the heroes of the recent crisis, read this Vanity Fair article. Warning — runs to over eight pages.
*His blunders — “There was the strong backing of Lehman Brothers’ management as the bank was imploding, kicked off by BlackRock’s purchase of a large block of Lehman stock at $28 a share, three months before the firm went bankrupt. And shortly after Bear Stearns collapsed, Fink advised investors to put their money into riskier, high-yield debt, just before that market tanked. BlackRock … also contributed its share to the toxic-asset morass—with close to $8 billion of collateralized-debt-obligation deals that defaulted in 2007 and 2008.”
‘But BlackRock’s most public and costly mistake—for its clients, at least—was its purchase of the iconic Manhattan housing complex Stuyvesant Town and Peter Cooper Village, a $5.4 billion deal that went into default in early January.” Remember GIC is an investor in this too. http://atans1.wordpress.com/2010/01/27/gic-ny-loss-us100m-more/http://atans1.wordpress.com/2010/01/24/gics-us675m-loss-juz-be-the-beginning/
BTW Temasek’s comments when it was criticised for losing money over BoA/ Merrill Lynch. If anyone has seen Gic’s comments over its Stuyvesant or UBS loss let me know. Not seen any on its website.