BlackRock’s Fink: Activism ‘Destroys Jobs’

Dec 12 2014 | 12:33pm ET

The verbal assault on activist investors continued this week, with BlackRock CEO Laurence Fink amplifying his earlier criticism of the practice, and adding his voice to that of advertising executive Martin Sorrell.

Fink bluntly told the DealBook conference in New York yesterday that hedge-fund activism “destroys jobs. He said that such short-term strategies may be good for shareholders, but aren’t good for employees—or the economy as a whole.

“If you asked me if activism harms job creation, the answer is yes,” he said.

Fink’s criticisms echoed those of Sorrell, who this week complained that activists are pushing company to be “too focused on the short term.”

Fink’s attack on activism followed its defense on the same stage by Elliott Management chief Paul Singer, one of the busiest and most strident of its practitioners. Speaking before Fink, Singer had no direct response to the latter’s comments. But he attacked noted corporate lawyer Martin Lipton, a bitter opponent of activists, saying that he “is wrong in saying that in general the activists have nothing to bring to the table.”

Yesterday was not the first time that Fink took a stand against activism. In March, he sent a letter to CEOs of Standard & Poor's 500 Index companies lamenting “the short-term demands of the capital markets” and urging them to stand firm against activists’ demands to improve shareholder value “at the expense of capital investment.”

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