BlackRock CEO Larry Fink’s Second Strategic Visit to India; A Growing Partnership with Reliance Industries
Larry Fink, the CEO of BlackRock, the world's largest asset management firm with over $9 trillion in assets, recently embarked on a significant visit to India. During this trip, he engaged with Mukesh Ambani, chairman of Reliance Industries Limited (RIL), and held discussions with Prime Minister Narendra Modi. Fink's visit carries great importance, as it comes on the heels of the announcement of an asset management joint venture between Jio Financial Services and BlackRock, aiming to serve India's burgeoning investor population.
BlackRock CEO, Larry Fink, made a brief visit to India over the weekend to meet with business magnate Mukesh Ambani and engage with policymakers.
During his visit, Fink, who oversees the world’s largest asset management company with over $9 trillion in assets, also had a meeting with Prime Minister Narendra Modi in New Delhi.
While in Mumbai, Fink, a somewhat controversial figure in American corporate circles due to the debate surrounding environmental, social, and governance (ESG) issues, visited the expansive Jio Campus in Navi Mumbai and RIL’s high-end retail center in the Bandra Kurla Complex; likewise he also met with the senior leadership of Reliance Industries Limited (RIL).
The JV aims to launch a digital-first asset manager targeting the growing investor population in India, with both partners planning to invest up to $150 million in the 50:50 venture.
Larry Fink emphasized the significance of India as a part of BlackRock’s global platform, acknowledging that India is at the forefront of digital transformation, largely due to the digital and consumer ecosystem created by Reliance and Jio, unparalleled anywhere else globally.
The visit holds significance as this was Fink’s second endeavour to target the Indian retail investor, as he previously divested his stake in a prior alliance with the Hemendra Kothari-led DSP Group in 2018; there were discussions about a potential joint venture with the HDFC Group afterwards, but that did not materialize.
BlackRock, headquartered in New York, already maintains a substantial presence in India, with 2,400 employees engaged in investment, operations, analytics, and corporate functions. Roughly 15% of the $422 billion in Asian assets managed by BlackRock are situated in India, with an additional $13 billion in direct Indian exposure managed for global clients.
The number of retail investors in India has surged since the COVID-19 pandemic, reaching 36 million as household savings are institutionalized. RIL aims to distinguish itself in this space with a likely focus on passive investments.
Sources indicate that Fink’s visit, with an operational team already in place to run the business, was focused on strategy and building upon what has been announced. BlackRock’s digital platform, Aladdin, which stands for Asset, Liability, Debt, and Derivative Investment Network, aligns with Ambani’s vision of using data and technology to disrupt Indian financial markets.
The timing of Fink’s visit, just before the COP28 summit in Dubai next month, is noteworthy as both Reliance and BlackRock have been advocating the clean energy agenda.
Ambani previously announced that all Reliance businesses would achieve net-zero carbon emissions by 2035; Fink will lead Wall Street’s CEOs at this year’s COP28 talks after abstaining from the summit in Sharm El-Sheikh, Egypt, the previous year.
The involvement of major financial institutions in what appears to be one of the most finance-focused COP summits ever is partly because it is hosted by the UAE’s largest oil company, Abu Dhabi National Oil Co, whose CEO, Sultan Al Jaber, has mentioned an “inevitable” phase-down of fossil fuels without specifying a total phase-out date.
Larry Fink’s annual letter to shareholders is highly anticipated, but he has faced criticism at home, with Republicans labeling BlackRock’s ESG initiatives as “woke capitalism,” and progressives accusing the company of “greenwashing.”
In April last year, BlackRock and Mubadala invested in Tata Power’s renewable arm, and it is speculated that Fink may support Ambani’s ambitious new energy projects.
Fink has been active in Asia in recent weeks, including a visit to Tokyo, where he hosted the world’s largest investors.
Following his India visit, he was scheduled to travel to Kuwait and participate in the “Davos in the desert” investment event in Riyadh, where he would be joined by other top American CEOs, including Jamie Dimon of JP Morgan Chase, Jane Fraser of Citigroup, David Solomon of Goldman Sachs, Stephen Schwarzman of Blackstone, and Harvey Schwartz of Carlyle.
BlackRock and Mukesh Ambani’s Jio Financial Services Forge Strategic Partnership in India
In June this year, BlackRock entered into a significant collaboration with Jio Financial Services, the financial arm of Indian tycoon Mukesh Ambani’s Reliance Industries Limited.
The partnership is poised to open doors for BlackRock into India’s rapidly growing asset management market; both companies plan to invest up to $150 million each in a 50-50 joint venture known as Jio BlackRock.
The move is a milestone in BlackRock’s pursuit of expanding its presence in India, marking its second attempt to gain a foothold in the country’s thriving asset management industry.
A Major Strategic Move
Larry Fink, expressed the significance of this collaboration as a means to expand BlackRock’s influence and provide their collective expertise and scale to serve millions of Indian investors and Mukesh Ambani, the billionaire founder and chairman of Reliance Industries, India’s largest listed company, is said to play a pivotal role in this venture.
Digital-First Investment Solutions
Jio BlackRock’s mission is to provide “digital-first” services that offer tech-enabled access to affordable and innovative investment solutions for India’s investors.
The joint venture will likely combine BlackRock’s proficiency in investment and risk management with Jio Financial Services‘ technological capabilities and deep market expertise.
Enormous Growth Potential
The move comes as the Indian asset management industry experiences significant growth, with the assets under management of Indian mutual funds doubling to $542 billion in the five years leading up to June.
BlackRock sees India as an “enormously important opportunity,” and Rachel Lord, the head of Asia-Pacific at BlackRock, believes that the convergence of rising affluence, favourable demographics, and digital transformation is reshaping the market in remarkable ways; the partnership aims to revolutionize India’s asset management industry.
The Last Bit,
BlackRock’s partnership with Jio Financial Services marks a crucial milestone in the global investment giant’s efforts to expand its footprint in India’s thriving asset management sector.
As India continues to experience rapid economic growth and digital transformation, the collaboration holds the promise of offering innovative, tech-driven investment solutions to the country’s millions of investors.
Thus, Larry Fink’s visit to India and the joint venture between Jio Financial Services and BlackRock are poised to tap into India’s expanding investor market and digital transformation, bolstered by Reliance’s ecosystem.
Moreover, Fink’s presence at the upcoming COP28 summit and his commitment to sustainable investments align with Reliance’s vision for a greener future.
