A new CORPNET working paper has been published by Jan Fichtner and Eelke Heemskerk and provides novel findings on the combined ownership of the Big Three (BlackRock, Vanguard and State Street). Fichtner and Heemskerk call them the ‘New Permanent Universal Owners’ as they are invested indefinitely in thousands of member firms of stock indexes. This paper assesses Big Three ownership in 17 major stock indexes from nine countries and shows that their voting behavior on buybacks and mergers & acquisitions so far does not support their claim to be champions of long-termism.
This publication is featured by Institutional Investor. In the interview Fichtner and Heemskerk say: “The concentration of ownership in their fund families was never on purpose; the concentration of voting power is a side effect of their successful business model. How can they now develop a responsible stewardship role without increasing their operational costs, without raising antitrust concerns and without undermining their business model?” The paper, having “struck a nerve” sparked reactions from BlackRock and Vanguard which can be read here.