Raphael Thys
Oxfam Research
BlackRock and Vanguard are two of the Big three passive fund asset management firms. The third, State Street, is owned by BlackRock -whose largest shareholder is Vanguard. It seems all roads lead to BlackRock.
All three combined $20 trillion in managed assets is the equivalent of more than half of the combined value of all shares of companies in the S&P 500 (about $38 trillion). And That’s larger than the gross domestic product (GDP) of every single country around the globe, except for China and the United States.
Bloomberg calls BlackRock “The fourth branch of government”, because it’s the only private agency that closely works with the central banks. These firms were right of Federal Reserve which helped in time of 2008 housing crises to clear the mess.
BlackRock and Vanguard AUM is $8.6 & $8.1 trillion, respectively. In total, they both own/invested in 1,600 U.S. companies(Reuters:2022).
Global Financial Markets
BlackRock’s secret weapon, an advanced trading algorithm called Aladdin(Asset, Liability, Debt and Derivative Investment Network) has been shaping global markets for decades.
Aladdin is a program that executes an average of 250,000 trades per day and operates more than $21.6 trillion is assets
Aladdin executes trades in every asset class across every industry and directs the actions of the Federal Reserve and almost every major U.S. bank. It controls over half of all ETFs, 17% of the bond market, and 10% of the stock market.
It collects data points on every market, every company and every asset and uses machine learning to calculate which trades to execute.
The network that makes up Aladdin is approximately 5,000 supercomputers that now act as the central nervous system for the world’s most sophisticated investors and asset managers.
Every major bank and fund has come to rely on Aladdin and its all-powerful AI to beat the market, which raises several fundamental questions about the nature of our fragile financial system.
Food industry
Let’s take PepsiCo as an example, 72% of stock is owned by no less than 3,155 institutional investors. The top 10 of investors together amount to a value of $59 billion dollars, but out of those ten, only BlackRock, Vanguard & State street own more stock than the other seven.
In PepsiCo, Vanguard Group is currently the largest shareholder with 9.29% of shares And in BlackRock with 7.84%.In Coco-cola, Vanguard and BlackRock has 8.51% and 7.19 % respectively.
The other big companies that own a myriad of brand names like Unilever, Mondelez and Nestlé, General Mills, The Hershey, Kraft Heinz and many more are from the same group of investors.
Tech Industry
BlackRock, Vanguard & State street owns the majority of stocks in Alphabet, Apple, Microsoft, IBM, Facebook, AT&T and many, than other institutional investors. Which makes them first mover advantage.
Holdings by Both investment firms
Energy Industry
BlackRock has invested $170 billion in U.S. public energy companies (2021) and $85bn investment only in coal companies.
BlackRock, State Street and Vanguard hold $46 billion in debt and equity in oil companies currently operating in the Amazon rainforest.
BlackRock & Vanguard combined holds in 19% of Philips 66, 21% in Valero Energy, 16% in ExxonMobil respectively and many big giants like ConocoPhillips, Occidental Petrol, Chevron corporation, GE…
Overall, the money manager of these firms has nearly $260 billion invested in fossil fuel companies around the world,
Pharma and Health Industry
The Vanguard grp is the largest shareholder in Johnson & Johnson with 8.89 %, Merck & Co with 8.95%. AbbVie with 8.97%, CVS Health with 10%,United health grp with 9%, Sun pharma, GlaxoSmithKline. In down the line, BlackRock holds second-largest shareholder in these companies and many more.
Digital Media
For unilaterally influence bipartisan information flow. “Vanguard and BlackRock are the top two owners of Time Warner, Comcast, Disney and News Corp, four of the six media companies that control more than 90% of the U.S. media landscape,” Together, BlackRock and Vanguard own 18% of Fox, 16% of CBS, 13% of Comcast --which owns NBC, MSNBC, CNBC, The Sky media group, 12% of CNN, and 12% of Disney — which owns a number of subsidiaries...
Apart from the many newspapers and magazines, they also own Sonoma, the parent company of big commercial Dutch channels. Many media outlets from abroad, like VTM, are also owned by the DPG media..
And they own Mediahuis, one of Europe’s biggest media, which works in the Netherlands with its subsidiaries.
And also owns German conglomerate “Bertelsmann”, which is one of the 9 biggest media firms. This company owns RTL, that owns 45 television stations and 32 radio stations in 11 countries. Bertelsmann is also co-owner of the world’s biggest book publisher, Penguin Random House.
Travel industry
Together Vanguard and BlackRock owns 21% of Expedia grp, 15% of Bookings holdings, 27% of American Express,13% of Boeing, 10% of Airbnb ,16% of TripAdvisor and many more.
Hired former government officials
As of 2021, at least three executives from BlackRock operate notable positions in President Joe Biden’s cabinet. Biden appointed BlackRock executive Brian Deese as Head of the National Economic Council, and Adewale Adeyemo, former chief of staff to BlackRock’s chief executive, is the top official at the Treasury Department.
BlackRock lends money to the central bank but it’s also the advisor. It also develops the software the central bank uses. Dozens of BlackRock employees were in the White House with Bush and Obama(Bloomberg Report).
Takeovers:
Both firm that has gobbled up lots of competitors in its path over the years. BlackRock has acquired 21 organizations till date. In 2020, acquired Aperio for approximately $1 billion in cash. In 2019, BlackRock acquired eFront,for $1.3 billion. In 2009, BlackRock acquired Barclays Global Investors in a deal that included Barclays' iShares ETF business. And the firm acquired Merrill Lynch Investment Managers.
NGO’s
According to the website of the World Economic Forum, the Gates Foundation is the biggest sponsor of the WHO. That was after Donald Trump quit USA financial support to the WHO in 2020. The Gates Foundation works closely with the biggest pharma companies among which are Pfizer, AstraZeneca, Johnson & Johnson, Bayer etc.
And we have just read who their biggest shareholders are.Highest shareholder of Microsoft & Berkshire Hathaway is owned by Vanguard, BlackRock and state street corp. And even bill gate is the board member in those groups.
These businesses are interlinked in a loop. To build a bridge between businesses, politicians, and the media, and to reduce corporate taxes by redirecting revenue to non-profit organizations, This conceals the conflicts of interests a bit.
Conclusion:
Data indicates that both companies have substantial first-mover advantages in all prominent businesses in various sectors.In turn, they, themselves are owned by shareholders and the most surprising thing is that they own each other’s stocks (Black rock holds 14.5% in Vanguard grp, whereas Vanguard holds 9% in Black rock)
Together, they form an immense network comparable to a pyramid. The smaller investors are owned by larger investors. Those are owned by even bigger investors.
The visible top of this pyramid shows only two companies whose names we have often seen by now. They are Vanguard and BlackRock.
The power of these two companies is beyond your imagination.
Source:
Bloomberg.com/Markets,Reuters,Yahoo finance, Worldbank.org, Koyfin.com