Who owns and controls global capital? Uneven geographies of asset manager capitalism

Abstract

Since the 1980s, U.S. finance has grown disproportionately in power and influence as American investment funds have become the largest shareholders of U.S. corporations, managing tens of trillions of dollars in investments. This paper provides a novel empirical analysis of the ascent of asset manager capitalism in the United States and explores the extent of its global spread by examining the SEC Form 13F filings of U.S. institutional investors along with an extensive global corporate ownership dataset provided by Orbis. This paper finds that U.S. finance owns approximately 60% of U.S. listed companies (an increase from 3% in 1945) and 28% of the equity of all globally listed firms. As the largest global shareholders and the exemplars of U.S. asset managers, the Big Three hold investments in 81% of U.S. listed companies and own 17% of the U.S. equity market, while also appearing as a shareholder in 20% of non-U.S. listed companies and owning 4% of the non-U.S. equity market. This paper illustrates that the ascent of the age of passive investment and universal ownership, exemplified by the activities of the Big Three, has produced a sectorally and geographically uneven landscape of capital flows, exacerbating the existing divides between the heartlands and hinterlands of global financial markets. With the ownership of listed companies being increasingly concentrated in the hands of a small number of increasingly powerful funds, this paper ultimately argues that it is in the ownership of the majority of global capital that the power of modern finance lies.