US - Institutional investors boosted their equity ownership control of US markets to US$19.6trn in assets in 2003, despite the stock market decline of recent years.
The Conference Board ‘Institutional Investment’ report showed the boost in 2003 nearly matched the peak achieved by US institutional investors in 1999, when assets controlled totalled $19.664trn.
That was before the market shakeout in 2000-2002, when total institutional investor assets dropped to $17.5trn, the report noted.
Dr Carolyn Kay Brancato (pictured), director of The Conference Board’s Global Corporate Governance Research Center, said: “The economic power and clout of US institutional investors continues.”
The report found activist public employee pension funds had grown from 7.4% of total institutional investor assets in 1980 to 11.6% in 2003. It said these public funds controlled $196.6bn in assets in 1980 (22.6% of total pension fund assets of $871bn), a figure which had risen to $2.27trn in assets (28.4% of all pension fund assets) by 2003.
Institutional investors as a group were gaining greater equity control over the largest 1000 corporations, the report continued. In 2000, they controlled 61.4% of the equity of the largest 1000 corporations. By 2004, they controlled 69.4% of these corporations.
Brocanto added: “The public pension funds are the most activist and the most coordinated with other global institutional investors. Ten years ago, these funds weren’t likely to join in lawsuits, but now, having been severely burned by the Enron and WorldCom situations, these funds are asserting themselves as never before.”
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