The New Mandate Owners: Passive Asset Managers and The Decoupling of Corporate Ownership

By Carmel Shenkar, Eelke M. Heemskerk & Jan Fichtner

A major shift toward passively managed index funds in recent years has led to the re-concentration of corporate ownership in the hands of just three large asset management firms, the Big Three: BlackRock, Vanguard and State Street. We propose that this trend has restructured ownership in capital markets. Adopting a contractual view to the corporate share, we re-define share holding and suggest that the New Mandate Owners in fact hold the essence of corporate power, as their aggregated positions capture the core element of the franchise of corporate voting.