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Larry Fink: MAGA Hero
Yes, you read that right. The BlackRock CEO fat cat the political right had loved to hate has suddenly become the darling of the MAGA movement following his $22.8 billion purchase of ports from Hong Kong-based CK Hutchison, including, very importantly, two in the Panama Canal zone.
The deal is big in size and significance since those Panama Canal ports are now no longer run by a Hong Kong company and under Chinese control; they are now in the hands of a US corporation, something President Trump demanded upon taking office just weeks ago. “China is operating the Panama Canal. And we didn’t give it to China,” the president said in his inaugural address, no less. “We gave it to Panama, and we’re taking it back.”
Fink did just that, and it marks one of the craziest 180s I have ever seen covering the confluence of politics and finance for 30 years.
After being the bane of conservatives everywhere for years, largely for his support of lefty Environmental Social Governance investing, Mr. ESG has become Mr. MAGA in the eyes of the Republican faithful. GOP critics, who tried to cancel BlackRock contracts in Red State America, are looking to back down.
“Larry just pulled one the biggest political upsets ever” is how one deal lawyer described Fink’s new status.
Truth be told, Fink is still a staunch Democrat. His woke rep obscured his acumen as a businessman. He created BlackRock from scratch nearly 30 years ago and grew it into a colossus, the world’s largest asset manager. He saw money in ESG and then saw money leaving it behind when the political climate changed.
Over the years, he’s has cultivated some the biggest clients in the world. He manages money for sovereign wealth funds, pension funds and lots of rich people — including, for a time, a certain real estate developer-turned-reality TV star named Donald J Trump.
Close relationship
He and the now-president remain close, an important plus in their Panama Canal dealings. Recall, it was Trump during his first term, meeting with bankers at the White House, who spotted Fink and said “Larry did a great job for me. He managed a lot of my money. I have to tell you, he got me great returns.”
Being smart about markets and sensing how the political winds blow is also how Fink got interested in CK Hutchison. The conglomerate, among other businesses, controls 43 ports around the world, including several very important to global shipping, in places like the Suez Canal and two buttressing the Panama Canal.
The Panama Canal connection is key, given its importance to the US economy and trade. The shipping lane was created around the turn of the last century by the US government; it slices through the five-mile isthmus to connect the Atlantic and Pacific oceans. You didn’t have to go around South America to get to China and Japan, just through the Panama Canal.
The US controlled the canal until 1977 when it turned it over to the government of Panama, and ever since, the relationship between the countries has been fraught. Panama was run by a drug trafficker, Gen. Manuel Noriega, whom in 1990 the US military arrested after a land invasion.
More recently, the Panama tension surrounded the Chinese, increasingly our global nemesis, with canal access a means to exert its economic and military power.
In 1997, Hutchison secured the rights to the canal’s two vital ports through 2046, which to many translates into de facto Chinese control of a valued shipping lane given the control exerted by the ruling Chinese Communist Party on China Inc.
Fink, meanwhile, saw a way to make money and appease the Trumpers in DC. Increasingly the firm had been investing and developing infrastructure around the world, and Hutchison was ripe for a buyout.
It was profitable, making really good money after COVID when ports became jammed in a supply-chain crisis. Yet Wall Street somehow didn’t like the company. Maybe it was the Chinese connection since pols in both major parties have been throttling deals by any company with China ties. Either way, Fink and his team noticed that Hutchison’s stock was trading at just around 30% of its so-called “book value,” the value of its assets minus liabilities.
It was, in a word, cheap.
Talks between both sides have been off-and-on for years. (BlackRock was thinking about just buying its stock.) When Trump took office and began mentioning the need to retake the Panama Canal from the Chinese (not exactly accurate but close enough for deal-making purposes), Hutchison was ready to move as was Fink.
Ties to Trump
The company met with other private equity players — Blackstone, KKR — but settled on BlackRock given what Fink brought to the table. He acquired a world-class infrastructure firm in 2024 and, of course, he still has his relationship with Trump, who could block any deal through any of several US regulatory agencies.
After working through the Trump Cabinet last weekend just before the deal was inked, Fink called Trump directly to break the news. “Trump was thrilled,” one person with knowledge of the conversation stated, and a MAGA star was born.
