The Australian federal government will investigate “megafunds” of power such as US giants BlackRock and Vanguard, while local superfunds will be questioned by the House’s Standing Committee on Economics on “shared ownership.” Makes a decision to investigate and dominates the country’s financial sector. “Whether that led to the possibility of collusion between companies.
Tim Wilson, a member of parliament and chair of the committee, said the Australian Stock Exchange is already exposed to centralized ownership by a small number of megafunds.
“A hand full of’megafunds’ makes all the decisions, locks out general investors, and doesn’t want Australians to pay higher costs on the stock exchange,” he said in a statement. ..
“The spillover risk of common ownership is the deprivation of rising prices and collusion, companies that impose public policy agendas while avoiding democracy, and general investors,” he added.
In February, Carole Comerton-Forde, a professor of finance at the University of New South Wales (UNSW), was presented by BlackRock and Vanguard. Owns 9.7% ASX300 Overview — 300 of Australia’s largest publicly traded companies.
In addition, Commission Vice-Chairman and Commonwealth Labor Party member Andrew Lee published a treatise (pdfIn April, along with Adam Triggs of the Australian National University, 49 of Australia’s 443 industries claimed to have shared common ownership, including banking, retail, insurance, iron ore mining, and explosives manufacturing.
Tenancy in common means that an entity owns shares in a competing company at the same time.
For example, BlackRock and Vanguard both own more than 5% of Australia’s “Big Four” banks, Commonwealth, ANZ, Westpac and NAB.
US investment giant State Street is also expected to be monitored.
State Street, along with BlackRock and Vanguard, is the largest shareholder in the US S & P 500 with 88% and the largest publicly traded company in the 500.
Meanwhile, groups such as Australia’s Aging Companies and the Australian Aging Investor Council (ACSI), which represents 36 aging companies, may also be investigated.
Rob Nicholls, an associate professor of regulation and governance at UNSW, told The Epoch Times that the investigation was not just about potential collusion. It is also about the development trends of ethical investment.
“For Tim Wilson, the chair of the investigation, the problem is likely to be the strength of the industry’s aging fund. For Vice-Chair Andrew Lee, the problem is likely to be Vanguard and BlackRock. “
“The issue of sharing has been considered by many scholars, but it is controversial whether there is a real problem,” Nichols said. “The potential for harm resulting from sharing is far greater than the harm actually caused.”
“The key issue for Tim Wilson is ESG (Environment, Society, Governance). In the United States, Vanguard, Blackrock, Fidelity, etc., ethical investments return higher to investors than investments in non-renewable energy. I decided to bring it, “he said.
In recent years, ESG or social justice goals have become more important in the decision-making of major Western companies. Some of these initiatives include gender diversity among staff and climate change response.
For example, BlackRock CEO Larry Fink is the largest investment fund managing US $ 9 trillion in assets worldwide and avoids investing in companies that are considered major sources of emissions, especially coal and oil production. I swear that.
This was after 1,715 companies worldwide (managing US $ 81.7 trillion) promised to take action against climate change in 2018.
This is a trend already felt by small and medium-sized Australian mining companies warning that it will be difficult to get financial support to get the project off the ground from financial groups.