BlackRock
Our client, the world’s largest asset manager, retained SCA to assist with providing research support for an academic paper (Asset Management, Index Funds, and Theories of Corporate Control) published on the Social Science Research Network (SSRN).
This paper argues asset managers are not as well-positioned to exert great influence over the companies in which they invest. As minority shareholders, they are incentivized to monitor companies for long-term performance and prioritize the interests of ordinary savers and investors. Specifically, this paper refutes the theories of John C. Coates, IV who argues that roughly “twelve individuals” will imminently control corporate America. This paper also debates the theories of Lucian A. Bebchuk and Scott Hirst who argue that asset managers do not and will not sufficiently assert their influence on portfolio companies due to a combination of incentives and conflicts.