BlackRock seeks to raise $10 billion to make direct investments in companies

blackrock, warren buffet, larry fink
Larry Fink is making a Warren Buffet move.

BlackRock (NYSE:BRK) announced they are aiming to raise more than $10 billion to buy stakes in companies, causing some to question whether he is trying to replicate Warren Buffet’s Berkshire Hathaway.

With what is a first strategy for the asset manager, the company is seeking to raise the amount through sovereign-wealth funds, pensions and/or other investors to invest directly into companies. The capital will go to a new unit of the company called BlackRock Long-Term Private Capital, as reported by The Wall Street Journal.

Moreover, the maneuver will place BlackRock in direct competition with Wall Street companies such as Carlyle Group, Apollo Global Management and Blackstone Group.

Although it seems Fink is imitating Buffet, the fund, which oversees $6 trillion in assets, is not planning on buying whole companies as Berkshire Hathaway does.

On the other hand, their intentions are to invest in long-term themes such as diverging demographics, ‘the  growing middle-class’ and how millennials spend their money. The investments are expected to be between $500 million to $2 billion each.

The unit will be overseen by Mark Wiseman and David Blumer and they expect to raise the funds for mid 2018.

Blumer is the head of alternatives at the New York company. Wiseman was hired in 2016 to run BlackRock’s equity business, before he was the head of Canada’s largest pension fund, Canada Pension Plan Investment Board.

“Mark is not only a best-in-class investor but also a great leader of investors. He has deep experience in both public and private capital markets globally – having worked with and driven strong investment results for some of the biggest and most sophisticated pools of investment capital in the world,” said Fink back in 2016 when they hired him.

BlackRock is an American global investment management corporation founded in 1988 based in New York. They now operate in 30 countries, with clients in 100 countries.

Earlier this January, Fink issued a warning letter telling companies that they should not only deliver good performance, but they should take into account their impact on society, such as climate change.

“To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society,” said Fink.