In the space of just a few decades, the ownership landscape of the global economy has been radically transformed. For much of the past half century, our large corporations were primarily owned by individual shareholders, insurers and pension funds. Today however, they are overwhelmingly owned by asset managers – financial intermediaries who invest on behalf of beneficiaries such as pension holders or wealthy individuals.
Crucially, this growth has been accompanied by an enormous concentration of assets and power within the asset management industry itself. BlackRock, the largest manager worldwide, controls $9 trillion in assets; its closest competitor, Vanguard, controls $7 trillion. Together, that’s enough to own every company listed on the London Stock Exchange, four times over. With ownership comes voting rights to shape corporations’ actions on everything from the climate crisis to working conditions.
From snapping up vast real estate portfolios to administering the Federal Reserve's COVID-19 corporate bond purchase programme and advising on the EU's sustainable finance legislation, BlackRock’s power has grown enormously during the pandemic. Indeed, the extent of its influence in the US led two Bloomberg journalists to describe BlackRock as a ‘fourth branch of government’. These giant asset managers are now among the most powerful companies in the world, yet most people have never heard of them.
