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BlackRock CEO urges US infra privatisation

In a letter to shareholders, Larry Fink says policymakers, workers and unions must find a model that generates the kinds of returns that attract private capital.

BlackRock chief executive Larry Fink has called for an increase in private investment in infrastructure, saying that private capital is “desperately needed” to close the infrastructure gap.

“US policymakers, workers and unions must work together to find a model that will allow private enterprise to generate the long-term returns necessary to attract capital and build a more prosperous future,” Fink wrote on Monday in a letter to BlackRock’s shareholders.

Pointing to the municipal finance system that helped build American infrastructure half a century ago, Fink said the success of this model stopped the US from developing a sufficient market for private infrastructure investment. The US “lags the rest of the world” in efficiently delivering infrastructure projects through private ownership, he added.

“Fly into London, Zurich, or Sydney and you land at a privately owned airport,” Fink noted. “In the US, by contrast, virtually every major airport is owned by a government entity.”

Fink, whose firm manages a $30 billion real assets platform, said there is an “enormous amount” of private capital and appetite looking to fund infrastructure. Such investments, he said, provide new sources of returns for investors while creating jobs and fostering economic growth.

The BlackRock chief executive's comments come as the Trump administration is considering an infrastructure package, with a significant role envisioned for public-private partnerships and private investment. He is a member of President Trump’s strategic and policy forum, alongside Global Infrastructure Partners chairman Adebayo Ogunlesi, which advises the president on economic policy.

Fink advocated creating a new form of federally subsidised bond to finance infrastructure maintenance, but said policymakers must also consider how to improve broadband access, update transportation infrastructure to accommodate new vehicle technologies and plan for a longer-living population.