2018
|
Majiti, O Are the Sleeping Giants Awakening? An Investigation into the Investment Stewardship Efforts of the Big Three Passive Investment Managers Masters Thesis University of Amsterdam, 2018. @mastersthesis{Oumaima,
title = {Are the Sleeping Giants Awakening? An Investigation into the Investment Stewardship Efforts of the Big Three Passive Investment Managers},
author = {O Majiti},
url = {https://corpnet.uva.nl/oumaimamajiti_11047488_scriptie-3/},
year = {2018},
date = {2018-06-27},
school = {University of Amsterdam},
abstract = {Since the 2008 financial crisis there has been a rise in passive investment strategies, resulting in a re-concentration of ownership in the hands of the Big Three passive investment managers: BlackRock, Vanguard and State Street Global Advisors (SSGA). These asset managers have expressed that even though they deploy passive investment strategies, they are not passive owners. The passive asset managers actively promote environmental, social and governance (ESG) standards to their investee companies, aiming to protect and ensure long-term value creation for their clients. The two main tools of this investment stewardship approach, as it has been dubbed, are voting against management in shareholder meetings and company engagements. Many people have expressed their concerns over BlackRock, Vanguard and SSGA stepping up their investment stewardship responsibilities. The biggest concern is that the index managers, and more specifically the small group of investment stewardship team members, can potentially influence the corporate governance decision-making of a large number of firms, especially through the behind-closed-doors engagements. This thesis shows that whether and to what extent the Big Three have stepped up their investment stewardship efforts differs strongly. BlackRock hasn’t increased both its votes against management and number of engagements, Vanguard has increased its number of engagements but votes less often against management and SSGA has increased both its votes against management and number of engagements. At the same time, BlackRock has been the most vocal about stepping up its investment stewardship efforts. This thesis lastly shows that the Big Three’s investment stewardship teams strongly differ in recruitment style and composition. },
keywords = {Big Three},
pubstate = {published},
tppubtype = {mastersthesis}
}
Since the 2008 financial crisis there has been a rise in passive investment strategies, resulting in a re-concentration of ownership in the hands of the Big Three passive investment managers: BlackRock, Vanguard and State Street Global Advisors (SSGA). These asset managers have expressed that even though they deploy passive investment strategies, they are not passive owners. The passive asset managers actively promote environmental, social and governance (ESG) standards to their investee companies, aiming to protect and ensure long-term value creation for their clients. The two main tools of this investment stewardship approach, as it has been dubbed, are voting against management in shareholder meetings and company engagements. Many people have expressed their concerns over BlackRock, Vanguard and SSGA stepping up their investment stewardship responsibilities. The biggest concern is that the index managers, and more specifically the small group of investment stewardship team members, can potentially influence the corporate governance decision-making of a large number of firms, especially through the behind-closed-doors engagements. This thesis shows that whether and to what extent the Big Three have stepped up their investment stewardship efforts differs strongly. BlackRock hasn’t increased both its votes against management and number of engagements, Vanguard has increased its number of engagements but votes less often against management and SSGA has increased both its votes against management and number of engagements. At the same time, BlackRock has been the most vocal about stepping up its investment stewardship efforts. This thesis lastly shows that the Big Three’s investment stewardship teams strongly differ in recruitment style and composition. |