In a letter sent to the CEO of every company in the S&P 500 (SPY) over recent days, BlackRock chief Larry Fink warns the buybacks and dividend boosts sought by many activists may serve to boost short-term returns at the expense of long-term investment.
"Many commentators lament the short-term demands of the capital markets," says Fink in the letter (seen by the WSJ). "We share those concerns, and believe it is part of our collective role as actors in the global capital markets to challenge that trend."
A check of the scorecard over the last four years finds BlackRock voting with dissidents in contested board elections about one-third of the time. As comparison, Vanguard voted along with activists 11% of the time, Fidelity 44%, and T. Rowe Price 52%. Activists clearly owe much of their success over the past few years to the willingness of institutional investors to side with them.