The biggest U.S. money managers are working to persuade Washington that they don’t harm competition among corporations as a debate about their sway has caught regulators’ attention.
and Vanguard Group have been getting in front of officials and disseminating research in an effort to quash concerns that large institutions’ holdings of multiple companies in a single sector hurts competition.
In doing so, they are wading into a divisive debate on what is known as common ownership. At issue is the broad ownership across companies in a given sector by investment firms like BlackRock and Vanguard, which combined manage nearly $13 trillion in investor money.
Many in the asset-management industry, government and academic circles say there isn’t clear evidence of whether common ownership causes anticompetitive effects.
But the fear is that by owning chunks of many companies in a sector, say in airlines or banking, investors are influencing them to act in ways that maximize gains for all. That is opposed to pushing individual companies to compete more vigorously with rivals and undercut one another on price.
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