The world’s largest investor BlackRock, has embarked on a buying spree of “undervalued” British assets in an apparent vote of confidence in the UK economy.
In an interview with The Times BlackRock’s chairman and chief executive Larry Fink said the fund manager has been buying positions in UK assets “across the board” after being reassured by Keir Starmer’s emphasis on growth.
In the interview he said: "[We] have allocated more capital back to the UK tactically now with the belief that in the short run, the new administration is trying to tackle some of the hard issues...I think the prime minister is articulating the needs of what we have to do."
He added that he was more confident about the investment prospects for the UK than this time last year, toward’s the end of Rishi Sunak's premiership. "I have more confidence in the UK economy today than I did a year ago," he said.
BlackRock manages a total of $11.6 trillion on behalf of pension funds, retail clients and sovereign wealth funds. It has about £570 billion of UK assets, including in shares, bonds and infrastructure such as Gatwick Airport.
Fink, 72, said he was reassured by what he said was "a capitulation moment" across Europe - including in the UK - where governments finally recognised that their problems were so severe that there had to be a change of path and more emphasis on growth.
He said: "It just resonated with me - that there are so many fundamentally strong attributes about the UK and Europe and they've been so smothered by over-regulation, by too much control."
He cited the increased speed of decision-making at the Competition and Markets Authority as an example of a more pro-growth agenda in Whitehall. "I don't know what's changed it, but it's a good change."
He also said many UK assets were hugely undervalued.
He added:"So many of the UK stocks' discounts were too deep, especially like in the banking system. Look at the rebound in the valuations of NatWest and Lloyds and how they bounced."
He acknowledged that while many British business leaders were critical on issues such as higher employers' national insurance payments the “bigger picture” for the UK looked more upbeat.
He said: "I've heard that message, but I'm looking at the bigger macro picture and, you know, there are so many opportunities investing in infrastructure here in this country."
