In his latest work, “Our Lives in Their Portfolios: Why Asset Managers Own the World,” Brett Christophers shines a critical spotlight on the expanding influence of asset managers in our daily lives. With the release of the new paperback edition, Christophers delves into the intricacies of what he terms an “asset-manager society.” This society is characterized by the ownership of essential assets—housing, infrastructure, and more—by colossal investment firms like Blackrock, Macquarie, and Allianz. As these firms increasingly venture into “alternative” assets, the implications for everyday life become more pronounced.
The crux of Christophers’ argument lies in the fact that many individuals are unknowingly living in homes and utilizing infrastructures owned by these financial behemoths. When you park at a meter in Chicago or rely on a hospital for care, the reality is that the entity controlling these assets is often a faceless investment fund. Christophers highlights that “99 percent of the time, we have absolutely no idea that that’s who actually owns the assets.” This lack of awareness is not just a minor inconvenience; it poses significant challenges in understanding the power dynamics at play.
The labyrinthine corporate structures that asset managers employ further obscure their ownership. When one attempts to trace ownership back through layers of holding companies, they often find themselves lost in a maze designed to limit transparency. As Christophers notes, “it will typically be extremely difficult to find out much about that arrangement.” This opacity is a deliberate strategy, allowing asset managers to operate with minimal scrutiny while reaping the financial benefits of their vast holdings.
Brookfield Asset Management stands out as a prime example of this new financial paradigm. With nearly $1 trillion in managed assets, Brookfield epitomizes what Christophers describes as the “real-asset asset manager par excellence.” Its dual focus on both housing and infrastructure distinguishes it from other players in the field. While firms like Blackstone and Macquarie have carved out niches in either housing or infrastructure, Brookfield has managed to dominate both sectors, solidifying its position in the asset-manager hierarchy.
The Canadian model of pension funds, particularly the Canada Pension Plan and the Ontario Teachers’ Pension Plan, offers a counter-narrative to the global asset manager phenomenon. These pension funds have begun to invest directly in housing and infrastructure, thereby circumventing the traditional asset managers. Christophers argues that this model could serve as a blueprint for other regions looking to reclaim control over essential assets.
However, the question remains: Who truly benefits from this asset-manager society? The answer is complex. While institutional investors like pension funds and sovereign wealth funds stand to gain financial returns, the broader public often finds itself at a disadvantage. Christophers emphasizes the need for scrutiny and reform to ensure that the ownership of fundamental assets does not come at the expense of societal welfare.
In a world where asset managers increasingly control the basic building blocks of life, the implications for future developments in the sector are profound. As awareness grows, so too does the potential for resistance against this opaque power structure. Christophers offers proposals for fighting back, suggesting that transparency and accountability must become central tenets in the discourse surrounding asset management. The future of our cities, homes, and essential services may well depend on our ability to challenge the status quo and demand greater oversight of these financial titans.
