BlackRock: The $4.3 trillion force

Blackrocks's Larry Fink
contract Armin Harris
Photo by Marco Grob for Fortune

Larry Fink, 61, tall and outgoing and passionate about his business, is the chairman, CEO, and co-founder of the largest asset-management company in the world, BlackRock. He loves his job, loves his management team, apparently even loves a life that is about as intricately structured as a Rubik’s Cube. Here, for a slice of that life, is how he describes a routine day.

It begins at 5:15 a.m., when Fink rises at his Upper East Side apartment in Manhattan to get ready for a 5:45 car that will drop him minutes later at the company’s Midtown headquarters. He will be carrying three newspapers–the New York Times, the Wall Street Journal, and the Financial Times–that he has already read online the night before. At 6:00 a.m., in his office, he hopes for an hour of what he calls “dead time”: time to think. Or he may interrupt himself by videophoning some BlackRock executive, whom he certainly expects to be available. By 7:30, Fink is into appointments likely to continue steadily–except that he always breaks in the morning to call his wife, Lori–until he leaves at about 6:30 p.m. And, yes, there will be breakfast in the office (cereal with blueberries and bananas) and a lunch (perhaps with a financial luminary at a prominent restaurant) and, on probably three nights–he hopes not four–a business dinner. Then he will go home, read the news, and be in bed at 10:30 p.m., expecting to sleep soundly before it all begins again at 5:15 a.m.

Exhausting, right? Yet there is also something in this picture of Fink’s unslackening day that quite perfectly matches BlackRock’s short but remarkable history. When Fortune published its 2013 list of the world’s 50 Most Admired Companies, five among them were 25 years old or less. Four were the usual suspects from tech land: Amazon, eBay, Facebook, Google. The oddball in this party of five was BlackRock (BLK), formed in 1988 by Fink and seven partners.

They’d been Wall Streeters, at First Boston and Lehman. They were sell-side bond experts, but not just any sell-side experts. They were inventors and traders of the complex asset-backed instruments–like mortgage-backed securities–then newly available. Fink’s transformative idea was that the buy-side half of a trade needed help to understand these products. So his band re-created themselves as asset managers.

The company began to grow, first in fixed income (which was in the early stages of a 30-year bull market) and next in the less familiar world of equities, where both separate accounts and mutual funds beckoned. In the equity realm, BlackRock bought State Street Research & Management in 2005, Merrill Lynch Investment Managers in 2006, and then–as the financial world blew up–no less than the then-largest asset manager, Barclays Global Investors, with its mountain of exchange-traded funds (ETFs) called iShares.

Fink agonized about handing over more than $15 billion in stock and cash to buy BGI in 2009, and in fact that outlay has given BlackRock a capital structure that throws off subpar returns on equity. An asset manager that has grown organically may have–as T. Rowe Price does–an ROE above 20%. BlackRock came in last year at 11.1%, which was below even the Fortune 500’s median, 13.7%.



BGI also proved a large challenge for BlackRock to integrate–it was both huge and distantly located, in San Francisco–and the job wasn’t completed for three years. Much of the delay grew out of BlackRock’s near-religious conviction that the technology platforms of any acquisition must be supplanted by BlackRock’s. BGI’s technology made its exit slowly, at a pace deeply frustrating to Fink. And out came his intemperate side, an inclination to be impossibly demanding on those below him when things don’t go right. He doesn’t fight the characterization, conceding, “I ruin everybody’s life.”

What Fink’s nerve and ambition ultimately did, however, was spread BlackRock over the entire asset-management business in a way never before seen. Nobody else–not even entrenched giants like Fidelity, State Street Global Advisors, and Vanguard–can claim BlackRock’s heft in both fixed-income securities and equities, nor in the range of products it brings to the market.

From an also-ran position in 2004, BlackRock became the No. 1 asset manager in 2009. After that, ETFs kept gaining popularity (riding a secular trend toward “passive” investment), and the stock market kept rising. By the end of 2013 the company had a colossal $4.3 trillion of assets under management (AUM). For the year, the company’s fees from managing that pile ran to about $9 billion–about 22 basis points per dollar of assets. Other businesses took in $1 billion in revenues, for a company total of $10 billion, along with $2.9 billion in profits. What was once eight partners has grown to more than 11,000 employees worldwide.

BlackRock has along the way gained other distinctions. For one, its $2.9 trillion in passive investments–that is, its holdings in index funds and ETFs–have left it owning more shares in more American companies than any other party. Ordinarily its stake in an indexed company is 4% to 6%. But if one of its actively managed funds barrels into a stock as well, the percentage can jump well above that range.

In another distinction, BlackRock has been a supernova stock, shooting from a 1999 IPO price of $14 a share to about $320 recently. That’s 22 times the original price, and today the company has a market value of about $53 billion. Justifiably proud of this climb, Fink is fond of pointing out that it dwarfs that of the S&P 500 (up not even one time for the same period) and also wallops that of many well-known stocks, such as Berkshire Hathaway (up three times).

The speed and trajectory of BlackRock’s ascent have been breathtaking. But the company’s $4.3 trillion in AUM has also brought it to an awkward turn in the road, where its very success has confronted it with a new set of challenges related to size and power.

From a corporate governance standpoint, the issue is the power of BlackRock’s proxy votes, many thousands of them cast every year. This is a story in which Larry Fink is both cloistered from BlackRock’s clout and trying to use it.

Politically, the company’s huge presence has put it in the sights of Washington, which has a way of equating dollar size with impending disaster. “No, no, no,” says Fink, “we’re just an asset manager, not a systemic threat in any way.”

Operationally, $4.3 trillion is simply a lot of size to swing around. There’s a restructured management team on the job, and one unit, U.S. equity mutual funds, that’s a sour apple. This is business as Fink has always known it: You have problems, you get past them, you grow.

The question of how much power BlackRock draws from the multitudinous shares it has to vote–and then how it chooses to use power–is complex. The portfolio managers of BlackRock’s actively managed equity funds–their value is about $315 billion–control the votes of those funds. These investors may even choose to campaign vocally when there is nothing to vote on. That happened recently when the British company AstraZeneca spurned Pfizer’s bid to take it over. In a rare instance of publicly raising their combined voices, BlackRock’s fund managers–big holders of AstraZeneca–surfaced together to urge the company to keep negotiating (which it has not, for the moment at least, done).

Photo by Reed Young for Fortune


BlackRock’s passive equity funds are voted by a BlackRock corporate governance team–we’ll get back to that–but also raise a special issue. An inconvenient fact is that the managers of these ETFs and index funds can’t sell the (inevitable) dogs in the portfolios. So if a proprietor of a passive fund–say, a BlackRock–wants to improve the quality of the kingdom, the only weapons available are words or votes.

In March, Fink resorted to words. He sent a personal letter to the CEOs of the S&P 500 companies and urged them to ignore “short-term demands” and focus instead on “achieving sustainable returns over the longer term.” That hardly sounds like a radical position, but lots of publicity ensued, and Fink says with satisfaction that his return mail lit up with approval.

Still, he did receive what he describes as “angry” calls from two activists–Carl Icahn and another Fink wouldn’t identify–who were less admiring of the message. As Icahn puts it, “We completely agree with Larry that companies should invest in their businesses if they have the capability to do so.” Icahn adds that such investment is dangerous if implemented incorrectly, “and what’s even more dangerous and concerning is that so many of the companies do not have CEOs that have the ability to make investments …”

Fortune itself, taking a very small survey of companies in the S&P 500, immediately ran into two that said the BlackRock analysts covering them had their own short-term demands–for good quarterly results. “My guy’s a fanatic,” reported the CEO of one of those companies. So it cannot be said that Fink’s letter has even influenced the whole of BlackRock. (“I’m not aware of that,” Fink says of the quarterly oriented BlackRock analysts, but “I wouldn’t be surprised if there was one [mutual fund] manager who has more short-term intentions than the firm otherwise would. We believe in the autonomy of their team, and their style is part of the process.”)

Fink himself appears ambivalent about the subject of BlackRock’s power. He clearly likes having “a voice” and may even see its judicious use as helpful in his negotiations with Washington. In June he spoke at a Deutsche Bank conference about the leverage built into some ETFs–none of them BlackRock’s, as he pointed out–and the capacity of leverage to “blow up” the entire industry. He immediately got a riposte from ProShares, an ETF sponsor that has made heavy use of leverage. Whose view is more prudent? Plainly, Fink’s.

Yet for all of his willingness to be outspoken, he has resisted suggestions in the media that BlackRock’s ability to vote its huge blocs of shares makes him–capital letters called for here–The Most Powerful Man on Wall Street. Not so, says Fink. BlackRock, he says, is not even a part of Wall Street–not part of the trading and capital-raising machine that defines a Goldman Sachs or a Morgan Stanley. He has a point: Did anyone ever try to argue that asset manager Vanguard, for example, is a part of Wall Street?

Well, then, is Fink possibly The Most Powerful Man in Financial Services? That title seems less catchy. In any case, Fink insists that influence is not his to wield personally, because he has recused himself from all votes and given that responsibility to a corporate governance team at the company.

Indeed, an unassuming California BlackRocker named Michelle Edkins, 45, and her global team of 20 decide both what principles should guide the company in voting and how they should be applied in specific situations. Edkins’s tally for 2012 shows that BlackRock considered 129,814 management and shareholder proposals and voted against management in 10% of them. In a big-name example, BlackRock voted (fruitlessly) against four Wal-Mart director nominees of particular note: board chairman Rob Walton and his brother, Jim, and former Wal-Mart CEOs Mike Duke and Lee Scott.

Just why did that occur? BlackRock has a policy of not explaining its votes publicly. Here, nonetheless, is a guess: In early 2012, Wal-Mart’s operations in Mexico were in the news for having allegedly paid bribes, which the Foreign Corrupt Practices Act prohibits. (Wal-Mart has not publicly conceded any bribery; a spokesperson says the company is cooperating with ongoing investigations.) So it is probable that BlackRock was lodging a protest vote and also laying some blame on the board’s most prominent members.

It is even possible that its votes eventually had some effect. For one thing, this year director Scott did not stand for reelection (though Wal-Mart said his absence from the slate had nothing to do with Mexico). For another, Institutional Shareholder Services, which advises corporations on voting their proxies, recommended in 2013 and again this year that shareholders vote against Rob Walton and Mike Duke. Its first reason, said ISS, was Wal-Mart’s failure to have ever disclosed whether senior executives of the company deserved part of the blame for the Mexico troubles. The second was certain pay issues.

Photo by Reed Young


As for activists–the very breed that disliked Fink’s letter–BlackRock sometimes votes for them. Studying 50 board fights from mid-2009 through mid-2013, proxy solicitation firm D.F. King found that BlackRock voted for 34% of the dissident directors nominated. Among its competitors, that made it a moderate. Vanguard backed only 11%. But Fidelity’s proportion was 44% and T. Rowe Price’s was 52%.

And does Fink really stay completely out of the voting decisions, some of which surely anger customers (existing or prospective)? For example, a CEO who was considering placing his pension business with BlackRock would probably not enjoy learning that it had just voted with an activist trying to oust him. So might Fink intercede to make sure that such a vote isn’t cast?

All an outsider can know here is that BlackRock’s rules–Fink’s own rules, so to speak–would absolutely prohibit that. The rules say Fink must stay out of the decisions, and he swears he does. He nonetheless reports getting dozens of phone calls a year from interested parties, some of them personal friends, asking him to push a vote one way or the other–“and that pisses me off, kind of,” he says, “because it puts me in an inappropriate position.” He says he works then to turn his callers away, putting them in touch with Edkins or her management-team direct boss, Rich Kushel. In another instance of Fink disengagement, he says he didn’t know how BlackRock voted its Wal-Mart shares until Fortune, interviewing him, brought them up.

There is a certain oddity to Larry Fink having problems in Washington. He is a strong Democrat who has close ties to President Obama and has often been rumored as set to take a big administration job, such as Secretary of the Treasury.

So here we are, with a problem that’s playing out in the Treasury. One of its arms, the Financial Stability Oversight Council, has been considering whether BlackRock and perhaps its biggest asset-manager competitors, Vanguard, State Street, and Fidelity, should each be named a nonbank SIFI–a “systemically important financial institution,” for which you can pretty much substitute Too Big to Fail. No company wishes to be a SIFI because these creatures (which include three nonbanks that have already fallen into the pen–GE Capital, American International Group, and Prudential Financial) must report to the Federal Reserve, whose regulation is expected to be strict. Were BlackRock a SIFI, the Fed might raise the company’s capital requirements. Or the Fed might begin to regulate certain businesses that BlackRock prizes, such as securities lending.

The SIFI battle could go either way for BlackRock, on a timetable that is completely uncertain. Until this matter is settled, it does not appear that BlackRock will be growing by way of big acquisitions. Fink professes not to want them anyway. But even if he did, a company whose huge frame is already agitating the government would surely not wish to paint that picture in more vivid colors by a big leap in size.

On the other hand, continued growth is intrinsically and enormously important to Fink, whose ambition, says a colleague, is “unrelenting.” So the target has shifted to the obvious: organic growth. By BlackRock’s definition, that means “net new business” gained in long-term assets under management. That definition excludes cash-management and advisory business. It also excludes the change in assets propelled by the swings in the stock and bond markets, which does not count as net new business.

In June 2013, at an investor day, BlackRock declared its organic growth goal, saying it would be aiming for 5% annually. On one level, that target seems reasonable. The potential market for BlackRock to grow is vast. Salim Ramji, 43, a former McKinsey & Co. senior partner who has just joined BlackRock as head of strategy, estimates the world’s assets under management to be about $150 trillion. That means BlackRock now has less than 3% of the total, which does suggest some opportunity for growth.

But, alas, in its first year of articulating the 5% organic growth target, BlackRock did not make it. Right after that investor day, the market got spooked by emerging-market issues and iShares suffered some big outflows. That unit recovered in the last half of 2013, but not by enough. For the year, from all sources, BlackRock captured $117 billion of net new business, which provided it with growth of 3.4%, or about two-thirds of the $174 billion it needed to make its 5% goal.

The point is that organic growth is hard when you have more than $4 trillion under management and need very large inflows of new business–more than $200 billion in 2014–to keep the total rising by 5%.

Fink seems undaunted. He says the 5% goal is “aspirational” for BlackRock employees and easy to understand. CFO Gary Shedlin puts it in stronger terms. “Nobody is happy with 3%,” he says, adding, “Our feet are being held to the fire to try to hit that 5% number.” Both Shedlin and Fink express optimism about the potential for growth. Indeed, Fink says he sees “more opportunities” than ever before in the company’s history.

Blackrock's Larry Fink
Fink, above Black-Rock’s trading floor, calls the firm “neurotically charged.”Photo by Marco Grob for Fortune
Photo by Marco Grob for Fortune


Still, the obstacles are not negligible. A special hurdle is that some institutions prefer to limit the amount of business they have at one asset manager. That mindset hurt BlackRock after it merged with BGI in 2009. Ultimately the company lost what Fortune estimates to have been about $160 billion in assets, as clients cut their allotments to the combined company.

The asset-management business is also competitive and prone to penalize players that stumble. BlackRock’s bond funds generally have been high achievers. But in 2008, even as bonds weathered the stock market storm, BlackRock’s fixed-income performance declined, and the company lost business. BGI came into the BlackRock fold with a set of “scientific active equity” mutual funds–that connotes quantitative, algorithm-driven strategies–and they were a disaster for BlackRock in the merger year of 2009. Right now every bond manager in the world–certainly including BlackRock, though no one there will discuss the topic–is trying to take business from Pimco, which has lost billions in assets under management because of performance and management problems. Vanguard has meanwhile brushed off the fact that its famous founder, John Bogle, doesn’t like ETFs (he thinks they encourage crazy, speculative trading) and begun to market them very successfully. When a visitor mentioned that competitive fact recently to BlackRock’s head of ETFs, Mark Wiedman, 43, he grinned and said, “Oops!” Then he generously described Vanguard as “a formidable competitor”–but primarily, he added, in the U.S.

BlackRock has also run into some legal and regulatory constraints when it has tried to be innovative, in ways that also flash some of its power. Through last year, one of the company’s investment arms was regularly surveying securities analysts about their view of the near future. The analysts were asked, for example, what surprises they thought could undo their forecasted earnings or what mergers they visualized happening. Perhaps because they didn’t want to say no to a company of BlackRock’s clout, many analysts answered. New York Attorney General Eric Schneiderman, however, concluded in January that these surveys sought too much nonpublic information and extracted $400,000 from BlackRock to cover the cost of his investigation. The company agreed to stop the surveys.

BlackRock also has a small capital markets group that works at creating products for the company’s clients to buy. Last September, BlackRock and Pimco joined together to help Verizon plan a gigantic, appealingly priced $49 billion bond offering, of which Pimco agreed in advance to buy $8 billion and BlackRock, $5 billion. When news of the deal’s allure swept the bond market on offering day, customers swarmed in and bid the bonds up. Presto! Pimco’s and BlackRock’s customers both had merchandise that they wanted and a book profit.

Talking to Fortune about this offering in March, BlackRock’s co-president, Rob Kapito, was still describing it as the kind of benefit that BlackRock’s large scale brings to the company. (One could also make the opposite point: Its clients’ assets have grown so massive that BlackRock sometimes has trouble finding good product to invest in.) The SEC had by that time indicated it was itself concerned about the fate of small investors and even small asset managers in bond offerings and had begun a general investigation of the subject. The SEC has since made no comment about its thinking.

In meeting the challenges of organic growth, BlackRock has the advantage of having an executive team greatly respected for what it has accomplished. The team is also unique in its links with the past: Five of the original eight partners are still at BlackRock and have in fact helped it keep a kind of we’re-all-in-this-together culture.

Besides Fink, the original-partner set includes the company’s co-president, Kapito, 57; its chief risk officer, Ben Golub, 57, who made BlackRock a technological whiz; vice chairman Barbara Novick, 53, who heads government relations (and is therefore on the SIFI case); and former vice chairman Susan Wagner, 53, who in 2012 switched from an operating role to become a BlackRock director.

And then, among the veterans who built the company, there is the special case of the second employee to join it in 1988, Charlie Hallac, 49, who just became Kapito’s co-president. Hallac has colon cancer, a fact that he and BlackRock have talked about openly since he was diagnosed in 2012. “Charlie lives for BlackRock,” says Fink. Despite having undergone radiation and chemotherapy, Hallac is still normally in his office at 7:00 a.m. Sometimes his wife, Sarah, comes to pick him up at 5:00 p.m. just to make sure that he leaves.

Peculiarly, most of BlackRock’s business triumphs have showered riches not so much on its creators (pity them not, because they still made millions) but on an early backer that stepped in to own their operation and finance them. This backer was emphatically not BlackRock’s first owner, private equity firm Blackstone (from which BlackRock–hello, identity confusion!–sculpted its own name). Disagreements between Fink and Blackstone’s Steve Schwarzman erupted in 1994 and made Fink search for a new owner. One turned up at the 11th hour in the corporate person of Pittsburgh banking company PNC. It paid $240 million for BlackRock in 1995 and in time transferred 18% of its ownership to 39 BlackRock employees.

Schwarzman later said that selling BlackRock was the worst business decision he ever made. The CEO of PNC who made the buy, Thomas O’Brien (now retired), recalls his thinking back when the deal was made: Fink and partners impressed him, O’Brien says, with their “ambition and obvious intellect.” He then paid the $240 million and got out of the way. PNC has since recognized $12 billion in pretax revenues and capital gains from BlackRock and still owns 21% of it, valued at more than $11 billion. If PNC were to cash out today, it would have reaped a nearly 100-fold pretax return.

As for Fink’s own stock portfolio, he held almost 4% of BlackRock as late as 2009, but has since made gifts to family and charities that have reduced his stake to 1% (valued at about $500 million). Do not even imagine, though, that this cut has reduced his passion about the business. Says Quintin Price, 53, a member of Fink’s management team: “One of the things I know about BlackRock is that Larry has an unalloyed desire to be world-class in anything we do.”

From many standpoints–though not all–the “world-class description fits BlackRock’s institutional business, which was the company’s bedrock in 1988 and remains that today. Of BlackRock’s $4.3 trillion in AUM at the end of 2013, $2.9 trillion came from institutional clients and only about $530 billion from retail clients. The other component of the total is iShares, whose assets at year-end, $914 billion, made it the world leader in ETFs.

The $2.9 trillion institutional business itself, of course, has components. About 66% comes from pension funds, much more of them defined-benefit plans than defined contribution (a business in which BlackRock lags partly because it is not a “record keeper” of employee accounts like defined-contribution leader Fidelity is). The other third of BlackRock’s institutional business is spread out: About 14% stems from such institutions as corporations and banks; 9% from insurance companies; 8% from official institutions, such as central banks and sovereign wealth funds; and the remainder from tax-exempt parties such as foundations.

Within BlackRock, many of these institutions are called “money-owners”–a characterization applied, for example, to pension funds, insurers, banks, and sovereign wealth funds. All are candidates to be patrons of an operation called BlackRock Solutions (BRS), which last year did about $600 million in business. A big part of that came from money-owners who have signed up for multiyear contracts linking them with a BRS electronic system called Aladdin (an acronym for Asset, Liability, and Debt and Derivative Investment Network).



Aladdin uses massive computing power to rationalize complex financial operations. Typically Aladdin captures the details of securities trades, values portfolios (both liquid and illiquid), and measures risk. Most famously, BRS and Aladdin were called on by the U.S. government during the financial crisis to value the portfolios of such on-the-rocks entities as AIG and Bear Stearns. In another application that could conceivably become famous, co-president Hallac thinks that Aladdin will someday be used to value the portfolios of individual investors. “I don’t know yet how we’ll get paid for that,” he says, “but I think it will happen.”

For about $2.9 trillion worth of reasons, BlackRock’s big institutional clients get loads of the company’s management time. Fink spends two weeks of every month visiting clients, many of them oceans away. The head of BlackRock’s institutional business has a similar schedule. That job has just been taken over by Mark McCombe, 48, an Englishman who previously ran BlackRock’s Asian operations. His predecessor in the institutional job was a man still younger, Rob Goldstein, 40. Today he’s chief operating officer and runs BRS, into which he was hired 20 years ago, in 1994, as a kid straight out of the State University of New York at Binghamton.

Goldstein and Fink appear to have markedly different experiences when they call on clients. Goldstein, aware that these folks probably don’t have market positions that totally satisfy them, says his standard question on a call is, “What are you trying to accomplish?” When the answer comes back, there is always a BlackRock solution for Goldstein to suggest.

Fink’s client calls seem to leave him doing most of the talking. “For some reason,” he says, “people want to hear my views a lot.” It’s safe to say that Fink, breezy and garrulous, doesn’t resist such requests too strenuously. Indeed, his chattiness occasionally prompts him to spill a detail others might prefer he kept to himself. For example, PNC has been close-mouthed about how much it has gained over the years from BlackRock, and its SEC filings are not exactly effusive on that subject. The revelation that PNC is $12 billion to the good on the deal came when Fink responded in a Fortune interview to a general question about the long relationship between the two companies and talkatively tacked on a specific figure about PNC’s take.

Fink thinks clients seek his opinions because his legacy is tied to trading desks, and that has left him still wired to the markets. Fink also picks up bits of intelligence as he travels –the news, for example, that a tech client is moving a big part of its manufacturing platform from China to Vietnam. He catalogues that fact and plays it, rather like a traveling minstrel, at the next stop. Fink is also compulsive about staying current on the political and economic developments that are affecting the markets. He wants every BlackRock employee to be right behind him on that–“a student of the market.”

If institutions are the foundation of the company, then its retail business selling U.S. equity mutual funds may be thought of as a less-well-constructed addition to the BlackRock mansion. In the first place, the company is not a broker-dealer (as Fidelity is, for example) and therefore lacks a means to directly reach retail customers. Second, it doesn’t have much to trumpet in equities, because the performance of its U.S. funds has been dismal.

This problem goes back to 2006 and BlackRock’s acquisition of Merrill Lynch Investment Managers (MLIM) for $9 billion. That deal was meant to fuel big growth in mutual funds for BlackRock, with the business to come from Merrill and from other retail platforms as well. The man named to lead this effort as head of equities was MLIM’s chief investment officer, Robert Doll, who seemed always to be on TV issuing bullish predictions.

Let’s agree the timing of this whole venture wasn’t ideal. Being bullish as 2008 began (said Doll that January: “Large companies and growth will win again”) didn’t work too well, with the S&P 500 tumbling 37%. But the U.S. mutual funds that Doll was personally managing did poorly as the crisis lifted, and by February 2010 he was out as head of equities and took over the lesser title of chief equity strategist. Two years later he was gone from BlackRock altogether.

The most electric figures Doll produced while there were his own pay, which for the two years it was published in BlackRock’s proxy statement exceeded Fink’s. In the first year, 2007, Doll got $29 million against Fink’s $28.3 million. In 2008’s bad times, though, the BlackRock board reduced Fink’s compensation to $21 million while Doll’s stayed remarkably high, at $26.2 million. (After that, a reorganization created a new management team–smaller in number–whose members became the only people subject to inclusion on the compensation tables in BlackRock’s proxy statement. Doll was not on the new team, so his pay at BlackRock was never again made public.)

Doll is now at Nuveen Investments, where he still makes annual predictions. Through a Nuveen spokesperson, he declined to comment.

Upon Doll’s departure from the top equities post in February 2010, Larry Fink put the global fate of BlackRock’s equity funds in the hands of the aforementioned Quintin Price, an intellectual Brit who had previously been running BlackRock’s international funds. He was given the title of head of fundamental equities and has since become chief of “alpha”–the attainment of investment results that better those of the general market–which makes him, well, BlackRock’s alpha male.

He has even begun to deserve the moniker because Fink greatly expanded his budget and told him to go out and hire the best U.S. equity teams he could find. Price describes the ensuing search for “world-class” managers as extraordinarily thorough, lasting many months and including interviews with 31 growth teams. “We kissed a lot of frogs,” he says, as he tried to identify those who were really princes.

For the five largest U.S. equity mutual funds, he settled on four teams. Two are now run by Peter Stournaras, who had come from Northern Trust to co-manage two BlackRock funds with Doll and who, under Price, moved to sole manager. The other team leaders hired were Nigel Hart, previously of hedge fund ReachCapital Management; Bart Geer, formerly of Putnam Investments; and Lawrence Kemp, who came from UBS.

So that’s a lot of action–but Morningstar data for the three- and five-year periods ended May 31 show that BlackRock’s U.S. actively managed funds performed much more poorly than index funds. In other words, they aren’t producing alpha.

The underlying data, however, are not all bad–they’re just inconclusive. BlackRock gave Fortune a version of a performance chart that the company presented to its board of directors in January. It showed the progress of BlackRock’s five biggest U.S. mutual funds, all of which Price had equipped in 2012 and 2013 with the new portfolio managers he’d hired. Those dates leave the funds short of the three-year record that is almost essential if a manager’s ability to deliver sustained performance is the issue. Still, the performance of all the funds has improved markedly under their new managers (see chart above).

That may not say much–not yet. But you can be sure that BlackRock representatives are out there marketing that record to broker-dealers and financial advisers. The BlackRock troops will be pushing bond funds and iShares as well. And they will also be talking about something new called “CoRI,” which stands for Cost of Retirement Income and for which BlackRock has high hopes.

CoRI is especially meant for the preretirement gang: people ages 55 to 64. It consists of two different elements: First, it’s a retirement calculator, similar to those on countless financial websites. Anyone can fill in a few facts–age, savings, and hoped-for annual income upon retirement–and be quickly advised how far their savings are taking them toward that goal. They will also be told how they might invest their savings so as to speed their progress. They could, for example, choose a conservative portfolio or a moderate portfolio or a moderate portfolio with CoRI exposure.

That gets to the second element of CoRI: It’s also a bond index fund, constructed by BlackRock, that uses long-duration bonds to increase returns. To get to that fund, though, requires a financial adviser, and BlackRock’s ultimate message on the site is “Share /CoRI/ with your adviser.”

Ah, those financial advisers, which are always the intermediaries through whom BlackRock must sell. Using outside market researchers, BlackRock has shown CoRI to hundreds of financial advisers and asked how many would be interested in using it with their clients. A third said they would. The rest said CoRI was too complex or would chew up too much of their time with clients. Charles “Chip” Castille, 49, who is BlackRock’s CoRI minder, thought the one-third favorable vote was a good result for a brand-new product. “Just think,” he says, “of how little investors understood about index funds when they began.”

BlackRock’s retail marketing is these days in the hands of an Englishman named Rob Fairbairn, 49. Because Fink avidly wants retail to grow, Fairbairn has the advantage of working with a significantly bigger budget than once would have been the case. That has allowed Fairbairn to increase the number of BlackRock salespeople calling on financial advisers.

Fairbairn’s business has also been helped by large quantities of television and print advertising aimed at burnishing the brand (and perhaps reminding a few more people that this is not Blackstone we’re talking about). The brand impresario has been the well-known public relations expert Linda Robinson, who until a few years ago headed the PR firm she co-founded, Robinson Lehrer & Montgomery. She also served then as a member of BlackRock’s board. But in 2011, acceding to Fink’s request, she made a switch not often seen, quitting the board and going to work as a BlackRock executive. Within a short time she made BlackRock’s ads (done by Ogilvy & Mather) ubiquitous. The company, for example, became for a while the Wall Street Journal’s biggest financial services advertiser. These days, though, its ad spending fluctuates by quarter and no longer leads the pack.

The increased budgets, the advertising, even Fink’s own admissions in the past that he paid too little attention to BlackRock’s mutual funds–all speak to his growth ambitions for the retail part of his business. Fairbairn says he also sees Fink’s tactical thinking around 6:30 in the morning, when Fink gets on his videophone and starts calling people around the world. When it’s Fairbairn’s and retail’s turn, Fink usually has three or four things on his mind. “I will have thought of two of them,” says Fairbairn, “but there’s always one I haven’t–and it’s infuriating. But there he is. He’s speaking to people, he’s triangulating information and ideas, and he’s in touch. And that’s a very unusual leadership style.”

Assuming he stays healthy, his style is likely to be extant at BlackRock for a good many years. He shows no sign of wanting to retire, and his energy is telegraphed by the schedule he keeps. Fink likes to describe BlackRock as a “neurotically charged financial services company.” By that he means an ambitious, competitive outfit that isn’t likely to lapse into self-satisfaction. (That phrase would also describe Fink himself.)

He does not seem like a man who would be content with having his stock rise only 22 times in a mere 15 years. Check him out in 10 years. He’ll probably still be rising at 5:15 a.m., working more than a 12-hour day, and heading out for a business dinner.

If he’s lucky, his SIFI problems may by then be past and the avenue for acquisitions reopened. He’ll probably be thinking of buying something big again. One could imagine Fink being interested in Fidelity. It has the broker-dealer network Fink needs. BlackRock has the public stock that Fidelity could use. After that Fink can finally stop–until, of course, he finds something even bigger to buy.

This story is from the July 21, 2014 issue of  Fortune.

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