U.S. Markets

BlackRock CEO sees upside in Trump's U.S. infrastructure plans

NEW YORK (Reuters) - BlackRock Inc BLK.N CEO Larry Fink seems optimistic about the potential for a $1 trillion infrastructure plan under the new administration of U.S. President-elect Donald Trump.

The BlackRock sign is pictured in the Manhattan borough of New York, in this October 11, 2015 file photo. REUTERS/Eduardo Munoz/Files

“Within the U.S. alone, markets are anticipating up to $1 trillion of domestic infrastructure investments over the next few years,” he said on a call discussing the company’s 2016 earnings with analysts on Friday. “We all know we desperately need those investments.”

The benefits might also trickle down to his company’s own bottom line.

BlackRock has been building up its own infrastructure unit, started in 2011. It works on public-private partnerships globally, and on complex endeavors that can range from wind farms to transportation projects, financed by equity or debt.

If the U.S. supports subsidized bonds like Build America Bonds, BlackRock municipal bond funds could snap them up, Fink told Reuters. Those bonds, which were offered under the economic stimulus advanced during the Obama administration, gave issuers a subsidy of some of their interest costs.

BlackRock’s private infrastructure funds also could support public-private partnerships, he said.

“Not just in the U.S. but globally we’ve built a large presence in infrastructure,” Fink said in the phone interview. “We’re very excited about our team.”

BlackRock actively managed $750 billion in bond assets at year’s end. Its infrastructure assets under management were $9 billion as of last year.

Such funds typically target institutions who can lock up large initial investments for a decade or more, but BlackRock has increasingly been targeting individual investors for such “alternative” investments, meaning those unlike traditional stock or bond holdings.

Last month BlackRock said it would lead a funding round for a startup called iCapital Network, which eases the path for individual investors to access private equity funds and other alternatives.

Overall, BlackRock manages $5.1 trillion in assets.

While the details of Washington’s plan for U.S. infrastructure are not yet clear, people on Trump’s team have touted public-private partnerships, including the president-elect’s choice to run the U.S. Transportation Department, Elaine Chao, speaking Wednesday at her Senate confirmation hearing.

“If there are more of these assets created with the administration, you’d look to BlackRock to tap into that and invest,” said Edward Jones analyst Kyle Sanders.

Fink, who had donated to Democratic presidential candidate Hillary Clinton, recently joined an advisory council to Trump that includes several other CEOs.

Reporting by Trevor Hunnicutt