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Icahn blames BlackRock for bond market volatility

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Activist investor Carl Icahn took a swing at the high-yield debt market and liquidity Wednesday, contending that BlackRock creates an "extremely dangerous situation" by encouraging debt issuance.

"They sell liquidity. There is no liquidity. That's what's going to blow this up," Icahn said while debating the merits of activist investing with BlackRock CEO Larry Fink at the Delivering Alpha conference presented by CNBC and Institutional Investor.

"I'm not blaming Larry personally. I'm blaming BlackRock," Icahn said to laughter from the conference attendees.

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While Icahn diverted to the conversation to a discussion on high-yield, much of the panel surrounded the merits of activism in corporate structuring. Activist investors "play an important role" but can act for short-term gains with little regard for future prospects in some instances, Fink said.

Carl Icahn and Larry Fink at Delivering Alpha in New York.
Adam Jeffery | CNBC

"What I'm worried about is we have seen way too much behavior toward share repurchases," Fink said.

Activism has become a contentious topic after recent high-profile proxy fights over corporate governance waged by big shareholders. Fink believes share repurchases, which can drive short-term stock gains, may contribute to a "below trend line" economy in the United States.

"There is a growing network of activists that have focused on short-term proxy harassment," Fink said, adding that "we're left with the garbage."

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Icahn noted that some proxy fights for short-term gains can end up "really bad." He added that companies should not buy back stock because an activist urges them to.

"You shouldn't go buy back stock for the sake of buying back stock because some activist is bothering you," Icahn said.