The Next Warren Buffett? Larry Fink’s Latest BlackRock Venture Mimics Berkshire Hathaway

February 8, 2018, 10:24 AM UTC

BlackRock Inc., the world’s largest money manager, is seeking to raise more than $10 billion to buy and hold stakes in companies.

BlackRock, which oversees about $6 trillion in assets, is seeking capital from sovereign-wealth funds, pensions and other big investors for an effort named BlackRock Long-Term Private Capital, according to a person familiar with the matter.

The new vehicle would make investments between $500 million to $2 billion on long-term themes like diverging demographics globally, the growing middle class and millennial spending patterns, said the person, who asked not to be named because the information is private. An example of an investment might be a minority stake in a family-owned business. Similar to the approach of Berkshire Hathaway Inc., BlackRock would look to hold on to its stakes for a long time. Unlike famed investor Warren Buffett though, the fund might not buy a whole business.

The Wall Street Journal reported the effort earlier Wednesday.

The move may position BlackRock, which is headed by Chief Executive Officer Laurence D. Fink, to compete with private-equity giants such as Carlyle Group LP, Apollo Global Management LLC and Blackstone Group LP.

Blackstone Roots

BlackRock began in the headquarters of Blackstone, its first financial backer, which gave BlackRock a $5 million line of credit for a 40% stake. While business was picking up, the relationship between BlackRock and Blackstone became tense, Bloomberg has previously reported. Fink had a falling out with Blackstone co-founder Stephen Schwarzman in 1994 over BlackRock’s independence, resulting in the sale of BlackRock to PNC Financial Services Group Inc. for $240 million.

BlackRock hopes to complete the fundraising by the middle of this year, the person said. The initiative will be overseen by Mark Wiseman with David Blumer, head of alternatives at the New York-based company. BlackRock hired Wiseman, the former head of Canada’s largest pension fund, in 2016 to run its global active equity business.

BlackRock and Neuberger Berman Group are among firms that California Public Employees’ Retirement System, the largest U.S. pension fund, might look to partner with as it seeks help to manage its $40 billion private equity portfolio, people familiar with the matter said last month. The retirement system, which oversees more than $350 billion, sent requests for information in December to a group of asset managers seeking a “strategic partnership” for its private equity portfolio, according to a document released by Calpers.

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