Asset managers are under scrutiny on two continents for their power and importance as well as concerns about the products they sell
. Get exclusive investment industry news and insights, the week’s top headlines, and what you and your clients need to know.Before the 2008 financial crisis, bankers were the undisputed kings of the financial hill, making markets, taking risks and cooking up complex financial products such as CDOs, CLOs and MBSs .
Three U.S. index fund providers – BlackRock Inc., State Street Global Advisors and The Vanguard Group – together control 15 to 20 per cent of most American companies. Asset managers and private equity houses also took over funding once provided almost exclusively by banks. They use “alternatives” – offerings that deal in private credit, infrastructure and real estate.
BlackRock has been a target because of its size – US$8.5-trillion in assets under management – and for chief executive officer Larry Fink’s prominent letters urging corporate leaders to move to net zero carbon emissions. Now questions are being asked of BlackRock, Legal & General Group plc and Schroders plc among others because they were big providers of these highly leveraged products.
More broadly, asset managers point out that they do not trade on their own accounts or lend out government-insured deposits. That means they are much less likely to need a rescue than a bank if they sell products that turn out to be riskier than expected. In most cases, the clients will bear the losses, not the fund manager.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
David Rosenberg: Equities are generally not pricing in a recession yet, but one asset class isCanadian equities likely have a bit further to fall, but won\u0027t decline as much as in prior recessionary periods. Read more.
Read more »
'Someone will get hurt': Investors and analysts warn on rising market stressBig swings across asset markets are raising the risk of a financial accident. Read more.
Read more »
Brookfield in advanced talks to buy Hong Kong firm Trimco, sources sayThe transaction with Brookfield Asset Management Inc. could value Trimco Group at as much as US$1 billion. Read more.
Read more »
'Someone will get hurt': Investors and analysts warn on rising market stressBig swings across asset markets are raising the risk of a financial accident. Read more.
Read more »
'Someone will get hurt': Investors and analysts warn on rising market stressBig swings across asset markets are raising the risk of a financial accident. Read more.
Read more »