There are few executives more qualified to talk about the credit crunch than Larry Fink.
The chairman and chief executive of BlackRock Investment Management - the American money manager preparing to take a majority stake in Barclays Global Investors (BGI), the bank’s fund management division - is a veteran of the mortgage markets.
Mr Fink, 56, sold his first collateralised mortgage obligation, in effect a bundle of home loans converted into tradeable debt, almost 26 years ago in 1983 while a bond trader at First Boston, the American investment bank.
He continued to be instrumental in popularising mortgage-backed securities after leaving First Boston in 1988 to set up BlackRock as the investment management unit of Blackstone, the private equity firm.
By the time that these securities backfired spectacularly two years ago, when one in ten American homeowners defaulted on their debt repayments and investment banks began collapsing like dominoes, Mr Fink had already begun to bet on shares and his reputation remained intact. Indeed, BlackRock knew where the toxic waste was buried and profited from mandates to try to sort out the mess at Lehman Brothers, AIG and Freddie Mac.
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If the deal with Barclays goes through, Mr Fink will preside over by far the world’s largest money manager. BlackRock, which manages $1.28 trillion (£800 billion) of assets, will pay about $13 billion for about 80 per cent of BGI, which has just under $1.5 trillion of assets under management. Barclays will retain a 20 per cent stake.
Mr Fink left Blackstone in 1994 after a disagreement over equity and formed BlackRock as a separate entity four years later, floating it on the stock market in 1999. His personal fortune is estimated at $250 million.
The son of a shoe salesman, Mr Fink shuns the trappings of wealth, however, taking the train rather than a private jet to a farm he owns in New York State. He is married to Lori, a photographer, and has three children. Joshua, the eldest, runs a hedge fund.
When Lehman collapsed on September 15 last year, triggering panic on world markets, Mr Fink was travelling to Singapore on business. He had left in the belief that Barclays would successfully buy the bank, only to arrive to see headlines that Lehman had filed for Chapter 11 protection from creditors and AIG was feared to follow suit.
“I felt like Charlton Heston landing on Planet of the Apes,” he said later. “My world had transformed.”