The chief of the world's largest asset management fund is not pleased with how things are going over in the U.K. amid its divorce with the European Union.
Sitting down with CNBC on Sunday, BlackRock CEO Larry Fink stressed that Brexit and its fallout have become a massive headache for the business world. BlackRock is the world's largest asset management firm, with some $6.4 trillion in assets under management as of October 2018, according to a company filing.
"Brexit is an immediate problem, and it's a problem that's quite frankly annoying every private sector organization in the world today," the BlackRock CEO told CNBC's Hadley Gamble.
"The irresponsibility right now of the U.K. in coming to a resolution is putting more and more private sector organizations on alert," he said. "We're spending more money than we ever dreamed we needed to do to start working toward Brexit."
The U.K. is due to leave the European Union on March 29 but the British Parliament has not yet agreed on, let alone ratified, Prime Minister Theresa May's Brexit deal. It raises the chilling prospect of Britain leaving the 28-member economic bloc without a concrete deal on future ties.
It means probably a smaller future in the U.K. in the future. And I'm not speaking about BlackRock, I'm hearing this from every organization.Larry FinkCEO, BlackRock
May has sought concessions from the EU over the most contentious part of the Brexit agreement – to do with the border between Ireland and Northern Ireland should the U.K. and EU fail to come to a trade deal post-Brexit. However, lawmakers in the U.K have yet to approve the deal.
"So just because of the lack of understanding of its direction, it's forcing all the private sector firms to be getting more prepared for Brexit, and I do believe this is not a good outcome for the U.K.," Fink said.
"We're already now making bigger plans on moving different components of our business to the continent, or to the U.S. And in doing so it means probably a smaller future in the U.K. in the future," Fink added. "And I'm not speaking about BlackRock, I'm hearing this from every organization."
Lobbying Group Frankfurt Main Finance claimed in a recent report that London's finance industry is poised to lose up to $900 billion by March 2019, while consulting firm EY found that financial services firms plan to move $1 trillion in assets out of the U.K.
The figure is small, however, when compared to the U.K.'s overall financial sector, EY noted. Britain's banking sector alone is thought to be at almost $11 trillion, though experts say this could change depending on what happens during and after March.
With no clear idea of what to expect, Fink emphasized "the annoyance that the leadership of every firm is experiencing right now, because we should have had better certainty of where we're going now."
He added: "It just costs money, but we're dealing with it."
Brexit's climbing costs
It's no secret that businesses are facing high uncertainty over their futures as U.K. politicians squabble over Brexit terms and fail to agree on a deal with their EU counterparts. Many international companies are withholding expansions, stalling investment plans and charting moves out of the U.K. as uncertainty reigns over the fate of the country and its status in relation to the EU.
British firms have diverted $10 billion of investment to the EU due to Brexit, a report from the London School of Economics revealed this month. EU businesses have cut their spending in Britain, leading to losses for the U.K. of more than $13 billion to date, and the report said that figure may rise.
One study found that EU exports to Britain could halve in the event of a no-deal Brexit.
Still, a number of global firms continue to show confidence in the U.K., with major investments for new offices and headquarters coming into London from the likes of Apple, Google and Facebook.