Pensions & Investments– The largest consultants’ recommendations of money managers don’t add a significant value, according to a new study of the U.K. money management industry.
Finance
The Effect of Institutional Ownership Types On Innovation and Competition
Harvard Law School Forum on Corporate Governance and Financial Regulation– In common ownership, the type of the common owner institution matters. Institutional ownership of firms has seen a marked rise in the past few decades, with average institutional ownership share of a firm rising from 20% to 30% in the 1980s to over 65% of the total by the 2010s, with residual retail ownership correspondingly falling from 80% to less than 35% of the firm. (See Borochin, Paul, and Jie Yang (2017). The Effects of Institutional Investor Objectives on Firm Valuation and Governance, Journal of Financial Economics 126.) Over the same period, the fraction of the average firm held by institutions holding blocks of same-industry rivals has risen from 4.5% to 28%. (See He, Jie, J. Huang, 2017, Product Market Competition in a World of Cross Ownership: Evidence from Institutional Blockholdings, The Review of Financial Studies 30.) This not only changes the portfolio properties of the institutional investors, but also has the potential to change the corporate strategies of held firms. Recent studies find opposing effects of common institutional ownership on the competitive behavior of firms:
Op-Ed: Wilful Defaults: The Financial Underbelly of the Indian Banking System
50,000% Markup for a Shot Makes the Case for a Single-Payer Healthcare System
Among Connecticut Cities and Towns, The Wealthiest Are The Big Spenders
Already Deep in Debt, Connecticut Struggles With Extremes of Wealth and Income
Connecticut’s Economy Fourth Quarter Growth Fails to Measure Up
Dan Haar: If the Dow index expels GE, who joins?
CT Post– In May of 1896, when General Electric Co. joined 11 other companies in the debut of the Dow Jones Industrial Average, GE was the shining star of the dawning century, a technology manufacturer among bulk commodity firms with names like American Sugar, U.S. Leather, National Lead and United States Rubber.