Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Fink the Lightning Rod Vs. Our Gambling Society Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, April 15, 2015

Fink the Lightning Rod Vs. Our Gambling Society

News summary by MFWire's editors

Larry Fink leads the largest asset manager in the world, and he has used that spot to gain a big microphone when it comes to the world of economics, finance, and even public policy. The BlackRock [profile] chief can be a lightning rod in a way that few others in the mutual fund and broader asset management businesses could ever dream of rivaling.

He's taken up that lightning rod mantle yet again. Last week Fink wrote a letter to the CEOs of companies in the S&P 500 Index, a letter they would reportedly receive yesterday. [Business Insider posted the full text of the letter.] He calls on his fellow CEOs to fight back against short-termism, against those activist shareholders and others who focus on quarterly earnings and boosting share buybacks and dividends right now while sacrificing longer-term gains.

Andrew Ross Sorkin of the New York Times reported on the letter Monday night, and Reuters and a host of others followed suit.

In terms of specific ideas, Fink called for a change in the U.S. tax code. He wants the definition of "long-term investments" to be be redefined as being held for at least three years, from the current one-year definition, to thus expand the scope of short-term investments that are counted as short-term for tax purposes and thus taxed at regular income tax rates rather than capital gains rates (typically lower) used for long-term investments.

Fink tells the Times that he sees investors as living in a "gambling society," and in his letter he lays out a forceful attack activist investors he sees as being too short-term in their outlook:

... [C]orporate leaders' duty of care and loyalty is not to every investor or trader who owns their companies' shares at any moment in time, but to the company and its long-term owners. Successfully fulfilling that duty requires that corporate leaders engage with a company's long-term providers of capital; that they resist the pressure of short-term shareholders to extract value from the company if it would compromise value creation for long-term owners; and, most importantly, that they clearly and effectively articulate their strategy for sustainable long-term growth.


The debate over Fink's words and tax reform proposal (which the Times sees as having "a low probability of ever happening") is spreading. Haverford Trust Co chief investment officer Hank Smith defends activist investors, singing praises (to Reuters) of Nelson Peltz of Trian Fund Management (the biggest shareholder of Legg Mason) as "a positive influence" and insisting that today's activist investors "are not going into this slash and burn."

On the flip side, star bond fund PM and Loomis Sayles [profile] vice chairman Dan Fuss comes down on Fink's side, telling Reuters that "there's too much catering to quarterly earnings engineering slash activist shareholders." 

Edited by: Neil Anderson, Managing Editor


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2022: Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. Irish Funds Annual Global Funds Conference 2022, May 30-31
  2. WealthManagement Edge, May 31 - June 3
  3. MFDF 2022 Fund Governance and Regulatory Insights Conference, Jun 8-9
  4. 28th annual Expect Miracles East Coast Classic, June 9
  5. 2022 Sohn Investment Conference, June 9
  6. IDC webinar - Cybersecurity for Fund Boards: The Current Landscape, June 9
  7. MMI webinar - Driving Business Value with Artificial Intelligence & Data, June 15
  8. MFDF webinar - Key Takeaways From Morningstar's 2021 Annual Fund Fee Study, June 16
  9. MFDF Director Discussion Series - Open Forum (Chicago), June 21
  10. 2022 MMI Emerging Asset Managers Forum, June 23
  11. MFDF In Focus: Capitol Hill, A Conversation with Congressman Bryan Steil, June 28
  12. Financial Planning INVEST, Jun 28-29
  13. MFDF webinar - Differentiating Mutual-Fund-to-ETF Conversions, July 19
  14. MFDF Director Discussion Series - Open Forum (New York), July 20
  15. 2022 MMI Distribution Leadership Forum, Jul 20-21
  16. MFDF webinar - Fund Boards' Oversight of Investment Performance, July 28
  17. MFDF webinar - Performance, Perception and Manager Selection, September 14
  18. 2022 ICI Tax and Accounting Conference, Sep 18-21
  19. 5th annual Expect Miracles Atlantic Coast Classic, October 3
  20. Nicsa Fearless Leadership Symposium, Oct 6-7
  21. 2022 MMI Annual Conference, Oct 19-21
  22. 2022 IDC Fund Directors Conference, Oct 24-26
  23. 18th annual Expect Miracles Wine & Spirits Event, October 27
  24. Nicsa 2022 General Membership Meeting, October 31 - November 2
  25. Tiburon CEO Summit XLIII, Nov 7-9
  26. 2022 ICI Tech Summit, Nov 8-9




©All rights reserved to InvestmentWires, Inc. 1997-2022
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use