DealBook Briefing: Blackrock’s Larry Fink Bets on Sustainable Investing

October 23, 2018

Good Tuesday morning. Evan Spiegel of Snap, Larry Fink of BlackRock, and Steve Ballmer of USAFacts and the L.A. Clippers will all be speaking at our “Playing for the Long Term” conference on Nov. 1 at Jazz at Lincoln Center in Manhattan. Register to attend. (Was this email forwarded to you? Sign up here.)

 

Masa Son of SoftBank

Masa Son of SoftBank Issei Kato/Reuters

Masa Son reportedly won’t speak at Saudi conference
Saudi Arabia’s investment conference opened today, with another big-name speaker taken off its agenda: Masayoshi Son of SoftBank has withdrawn from the conference, the NYT reports.
Mr. Son had been one of few big-name speakers still scheduled to attend the Future Investment Initiative event, after numerous high-profile C.E.O.s and politicians canceled amid concerns over the death of the Saudi journalist Jamal Khashoggi.
Mr. Son is in a difficult position. The Saudis are his biggest backers, providing $45 billion to the nearly $100 billion Vision Fund that is a big part of SoftBank’s future. But standing by them could alienate many of the start-ups that the Vision Fund is meant to invest in.
It appears that after weeks of internal deliberations, Mr. Son decided that snubbing the Saudis was the best course of action. An executive from the Vision Fund spoke at the conference as scheduled, the WSJ reports.
Many of those attending the Saudi conference will try to keep a low profile. One piece of advice from a banker who spoke to the FT: “Don’t get a photo with M.B.S.” (That refers to the Saudi crown prince, Mohammed bin Salman, who has been accused of playing a role in Mr. Khashoggi’s death.)
Governments also continue to struggle with how to navigate the controversy. Britain said it found Saudi explanations about Mr. Khashoggi’s death not “credible,” but it hasn’t taken further action. And while President Trump said he was “not satisfied” with the Saudi response, his Treasury secretary, Steven Mnuchin, met with Prince Mohammed yesterday, and a top adviser, Jared Kushner, sought to play down the tensions.
More Saudi news: President Recep Tayyip Erdogan of Turkey told members of his party gathered in Parliament this morning that a Saudi team had planned Mr. Khashoggi’s killing. Former Secretary of State Jim Baker, who helped lead the U.S. response to the Tiananmen Square massacre, outlined Mr. Trump’s hard choices. The Saudi conference’s website was apparently hacked yesterday. And the World Economic Forum doesn’t want the Saudi event to be described as “Davos in the Desert.”
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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
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Larry Fink of BlackRock

Larry Fink of BlackRock Lucas Jackson/Reuters

BlackRock bets on sustainable investing
The firm is already the world’s biggest money manager, with more than $6 trillion under management. But its C.E.O., Larry Fink, says that the future of investment lies in sustainability, with a focus on environmental, social and governance criteria. His calculation: Assets held in exchange-traded funds that focus on these types of investments will grow over the next decade to $400 billion from $25 billion.
Mr. Fink isn’t the first Wall Street executive to promote the idea. But the power of BlackRock could help this approach catch on. Today alone, the firm unveiled seven new ESG funds in the U.S. and Europe.
And the firm has grand ambitions. Mark Wiedman, the head of its iShares unit, told the FT: “One day we’ll drop ‘sustainable’ because this lineup will just be the core of all great portfolios.”
Paul Volcker

Paul Volcker Mike Segar/Reuters

Paul Volcker sees ‘a hell of a mess in every direction’
At 91, Paul Volcker has seen plenty of highs and lows in the U.S. But the former Fed chairman, whose memoir comes out this month, told Andrew in an interview that he was worried about the future of the country.
Looser regulations on banks may help usher in the next financial crisis, he says. Americans have little respect for the presidency, the Supreme Court or Congress. But Mr. Volcker’s biggest complaint is about the influence of money on how the country is run:
“The central issue is, we’re developing into a plutocracy,” he told me. “We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive. And they don’t like government, and they don’t like to pay taxes.”