Institutional Investors and The Rise of Common Ownership
Since the financial crisis in 2008, the prevences of investors radically changed. Lots
of investors moved from riskier actively managed funds (aimed at outperforming the
market) to passively managed funds (which follow the market).
This financial change has expanded the assets under management of already big
institutional assets managers, turning them into giants!
Recent studies have shown that these managers are the largest shareholders of
88% of the S&P500 firms. The three biggest investment funds, BlackRock, Vanguard
and State Street, have assests under management similar to the GDP of the entire
These institutional managers, the evidence shows us, would benefit from overall
industry wide success and not individual firm success.
Therefore, the question is raised: are passive investors exerting influence on firms
they own to compete less?
If this is true, what will be the responses of the government? How would breaking up
the big three be?
And what is the impact of these enormous influencial firms on consumer welfare?
Has financial theory forgotten about consumers?
On May 3th, please join us at Room for Discussion to discuss these and many other
topics with José Azar and Anna Tzanaki!
José Azar received his Ph.D. and master's degree in Economics from Princeton
University, and now is Assistant Professor of economics at the IESE Business
Anna holds a Ph.D. from the University College London (UCL) Faculty of Laws, and
now is a Senior Lecturer at Lund University Faculty of Law, publishing about
Antitrust/Competition Law and Corporate Governance.