BlackRock CEO acknowledges DeSantis’ withdrawal of $2B impacted company.

BlackRock CEO Larry Fink Admits Damage to Firm After Florida Governor Ron DeSantis Pulls $2 Billion in Assets

In a conversation at the Aspen Ideas Festival, BlackRock CEO Larry Fink acknowledged the impact of Florida Governor Ron DeSantis’ decision to withdraw $2 billion in assets from the firm in 2022. This move by DeSantis, who has been critical of BlackRock’s woke positions, dealt a blow to the company.

“The tax dollars and proxy votes of the people of Florida will no longer be commandeered by Wall Street financial firms and used to implement policies through the board room that Floridians reject at the ballot box,” stated DeSantis. “We are reasserting the authority of republican governance over corporate dominance and we are prioritizing the financial security of the people of Florida over whimsical notions of a utopian tomorrow.”

Earlier in the year, Florida Chief Financial Officer Jimmy Patronis announced the decision to pull back from BlackRock. This came after DeSantis and other trustees of Florida’s Board of Administration passed a resolution directing the state’s fund managers to prioritize investments without considering the ideological agenda of the environmental, social, and corporate governance (ESG) movement.

BlackRock responded to the withdrawal by criticizing DeSantis and his state, expressing concern that such political initiatives would sacrifice access to high-quality investments and ultimately harm Florida’s citizens.

Florida was not the only state to take action against BlackRock in 2022. South Carolina, Louisiana, and Missouri also pulled funds from the firm. Louisiana State Treasurer John Schroder stated that BlackRock’s support of ESG investing was inconsistent with the best economic interests and values of Louisiana.

During the conversation at the Aspen Ideas Festival, Fink admitted feeling ashamed of the political weaponization of the term “ESG.” He clarified that his investment letters were never intended to be political statements but rather aimed to address long-term issues for their investors. However, when pressed on the issue, Fink reversed himself, asserting his belief in conscientious capitalism.

Downgrade and Risks

In October 2022, UBS analyst Brennan Hawken downgraded BlackRock, reducing the target stock price from $700 to $585. The downgrade was based on environmental pressure to earnings and the risk associated with the firm’s ESG positioning.

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