March 23 (Bloomberg) -- Laurence Fink said BlackRock Inc., the biggest publicly traded U.S. asset manager, will participate in the U.S. Treasury’s programs to purchase troubled securities from banks.

BlackRock will take part in programs outlined today by the Treasury that will purchase loans and set up funds to buy mortgage-backed securities, Fink, chief executive officer of New York-based BlackRock, said today in an interview.

“This is not a panacea; it is not a silver bullet,” Fink said. “But this will take some of the overhang out of the marketplace. It is incrementally a really good thing.”

Treasury Secretary Timothy Geithner said today that the government will finance as much as $1 trillion in purchases of devalued real-estate assets, using $75 billion to $100 billion of his department’s remaining bank-rescue funds. The Public- Private Investment Program will also rely on debt guarantees by the Federal Reserve and Federal Deposit Insurance Corp.

BlackRock, which manages about $1.3 trillion in assets, has received government contracts in the past year to oversee securities from insurer American International Group Inc. and debt formerly held by Bear Stearns Cos.

Bill Gross, co-chief investment officer for bond manager Pacific Investment Management Co., said his firm also would participate in the bailout programs.

BlackRock will raise money from investors such as pension funds and endowments for the new Treasury programs, Fink said. The company might consider creating mutual funds so that individual investors can also participate.

Two Programs

Half of the Treasury’s funds will go to a “Legacy Loans Program” that will be overseen by the FDIC. The Treasury would provide 50 percent of the equity capital going to purchase a pool of loans from banks, with private fund managers putting up the rest.

The second Treasury program announced today, the “Legacy Securities Program,” will try to spur demand for securities backed by mortgages. The government will hire as many as five companies to raise private capital to purchase troubled asset- backed securities. Those managers will be eligible for matching Treasury funds.

“I think it is a very important step that the government is assisting private capital and creating new demand for these troubled assets,” Fink said.

BlackRock rose $20, or 18 percent, to $133.96 at 4:03 p.m. in New York Stock Exchange composite trading. The stock is unchanged this year, compared with the 8.9 percent drop by the Standard & Poor’s 500 Index.

To contact the reporters on this story: Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net.

Last Updated: March 23, 2009 16:16 EDT