Blackrock and Vanguard have $20 trillion, so they could control almost everything by 2028
Imagine a world where two asset managers make the decisions. Their wealth is greater than the current U.S. GDP. Nearly every retiree, government, and hedge fund is a customer.
It is closer than you might think. According to Bloomberg News calculations, BlackRock Inc. (and Vanguard Group) are now less than 10 years away from managing US$20 trillion. This sum will most likely cause a disruption in asset management, increase their ownership of large U.S. businesses and test the twin pillars of market efficiency and corporate governance.
Jack Bogle, Vanguard founder and widely known as the father of index funds, is raising concerns about the possibility that too many dollars are in too few hands. BlackRock, Vanguard, and State Street Corp. all own significant stakes in some of the largest U.S. businesses.
Bogle stated that about 20% of this oligopoly was owned by the three oligopolies at an appearance at Council on Foreign Relations, New York on Nov. 28. It is too bad there aren’t more people involved in the index-fund industry.
Vanguard’s US$4.7 trillion in assets could be converted into more than US$10 billion by 2023.
BlackRock, however, may reach that milestone two years later. According to Bloomberg News projections, BlackRock will surpass the mark of US$6 trillion, which is almost twice today. These projections are based on five-year average annual asset growth rates. These gains are partly due to a bullish stock market that has driven assets into investment products. It is possible for this trend to continue.