Proxy power to the people?
Of all the interesting, simplistic, or downright moronic arguments aimed at passive investing over the years, that the phenomenon would lead to an unhealthy concentration of corporate power always felt like one of the stronger ones.
You don’t have to be a believer in the “common ownership” theory (that large cross-industry shareholding might diminish a company’s competitive zeal) to feel a little uneasy at the idea of just a handful of asset managers exerting de facto control over swaths of the economy.
Both the right and left have been savaging big asset managers like BlackRock, Vanguard and State Street — the Big Three of passive investing — either because of their perceived inaction or hyperactivity on a range of subjects.
This story originally appeared on: Financial Times - Author:Robin Wigglesworth
