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Fink weighs ending PAC after ‘assault’ on democracy at Capitol

BlackRock CEO Larry Fink said his firm will consider eliminating its political action committee after last week’s attack at the U.S. Capitol.

The incoming administration must work to “bring people together,” Fink said in an interview Thursday, after BlackRock reported fourth-quarter results. Fink joins a chorus of corporate voices reconsidering their roles in the political process in the wake of the Jan. 6 unrest, which resulted in an unprecedented second impeachment for President Donald Trump.

The riot was an “assault on our democracy” and “on the democratic foundations of what this country represents,” said BlackRock CEO Larry Fink.

Bloomberg News

The company had already paused PAC-giving after hundreds of rioters, egged on by Trump, stormed the building, where 147 Republican lawmakers sought to block the certification of Joe Biden’s election victory.

The riot was an “assault on our democracy” and “on the democratic foundations of what this country represents,” Fink, 68, said in an earlier interview with CNBC. “It’s going to leave a real mark.”

Fink, who had been considered a potential candidate for a Cabinet post under previous Democratic administrations, said easing political tensions will be a critical challenge for Biden.

His outlook for the economy, meanwhile, is bullish. Fink predicted that markets will march higher in 2021, particularly in the second half, as the distribution of COVID-19 vaccines accelerates. BlackRock finished 2020 on a high note, with a record $8.68 trillion of assets under management at the end of the fourth quarter, an 11% increase from Sept. 30.

While other asset managers struggled in 2020, New York-based BlackRock thrived in the wake of the economic shocks caused by the pandemic, which triggered the sharpest market swings in years. Investors pumped cash into almost all of the firm’s products.

BlackRock shares surged 44% last year, its best annual performance since 2013. The 65-company S&P 500 Financials Index fell 4.1%.

Long-term flows
Investors added a net $116.2 billion to the firm’s long-term investments such as mutual funds and ETFs, BlackRock said Thursday.

Equity funds took in a net $48.1 billion, and fixed income products drew $62.7 billion in net inflows.

The S&P 500 climbed 16% last year, and 12% in the fourth quarter, even as the U.S. unemployment rate remained elevated and a new wave of COVID-19 ravaged the country.

Investors continued to add funds to BlackRock’s passive products through the end of 2020. Quarterly net inflows into iShares ETFs were near record levels, taking in $78.8 billion in the period, up from $75.2 billion in the same period a year earlier.

Fourth-quarter adjusted earnings rose 20% from a year earlier to $1.57 billion, or $10.18 share, beating the $9.19 average estimate of analysts surveyed by Bloomberg. Revenue of $4.48 billion also topped estimates of $4.31 billion.

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