Using his influence as the head of the world’s largest money manager, Blackrock’s chief executive is telling CEOs of major global public companies, enough with the buybacks, it’s time to invest in the real economy.
Larry Fink’s firm is a giant in the field with $5-trillion under management.
Now, the head of the company behind the Ishares ETFs is writing his annual letter to CEOs, suggesting buybacks in the US, which is when a firm uses cash to purchase back outstanding shares, have happened “at a furious pace.”
Fink says the value of dividends and buybacks for firms in the broad-based S&P 500 index exceeded the total value of their profit in the 12 month period through to the end of September of 2016.
His letter covers many of the topical election issues, like the disproportionate effects of globalization.
But on the idea of repatriation of overseas earnings as suggested by President Trump, he insists that Blackrock will watch closely for which firms simply look to return to shareholders, or instead, balance the prospects of investing in future growth.