Ken Griffin's Fiscal Warning Casts Shadow on BlackRock's Macro Resilience

What happened

Billionaire Ken Griffin warned Davos leaders that reckless government spending is the primary risk to global markets and stability, highlighting systemic fiscal pressures. BlackRock's latest filings show record Q3 2025 AUM of $13.5 trillion, with 25% revenue growth and strong ETF inflows, underpinning a BUY thesis based on scale and technology moats. However, its advisory fees are heavily AUM-dependent, making it vulnerable to the market volatility and economic instability Griffin cites, as noted in its own risk disclosures. The DeepValue report already flags market volatility and geopolitical risks, but Griffin's warning amplifies these macro headwinds beyond typical competitive threats. Thus, while BlackRock's integrated platform offers some buffer, the external environment now poses a more pronounced risk to its fee-based model.

Implication

Griffin's warning signals increased systemic risk that could erode market confidence, directly impacting BlackRock's AUM and fee revenue if volatility spikes or growth slows. BlackRock's technology and subscription revenues provide some diversification, but its core business remains tied to asset levels vulnerable to government policy shocks. The BUY thesis relies on sustained ETF adoption and private markets growth, which may falter in a destabilized fiscal environment, necessitating closer monitoring of flow trends and fee yields. Investors should assess BlackRock's resilience through its balance sheet strength and buybacks, but be prepared for potential multiple compression if macro conditions deteriorate. Ultimately, while the company's scale is defensive, it is not immune to broader market downturns driven by fiscal recklessness.

Thesis delta

The BUY thesis is unchanged but now carries increased macro risk weight; Griffin's warning reinforces existing volatility concerns without altering BlackRock's fundamental strengths. Investors must factor in a higher probability of external shocks that could pressure AUM and fees, though the company's diversified platform and technology offerings provide partial mitigation. No shift to HOLD is warranted yet, but vigilance on fiscal developments is essential.