The Tyranny of the Institutional Investor
The modern investment landscape is dominated by a troubling reality — a staggering 89% of all equities and stocks are owned by institutional investors and the ultra-wealthy elite. This concentration of financial power in the hands of a privileged few poses a grave threat to the principles of a fair and democratic market.
It’s a similar situation as with regulatory capture: the high level commissioners/managers get woo’d and lobbied by “alternative investment” financial firms to invest in high risk/high fee funds. On the flip side, those managers often end up getting hired by said firms, both as a payback for the investments, but also because they’re connected to other pension fund managers and can turn around and lobby them. If you want a deeper dive, Naked Capitalism has a long-running series of articles on the corruption and mismanagement at calPERS (the California state public employees’ pension fund agency).