The institutionalisation of capital, consolidation of flows and oligopolies in asset management | Delilah Rothenberg and Denise Hearn
In episode 92, Alex Proimos speaks with Delilah Rothenberg, co-founder and executive director of the Predistribution Initiative and Denise Hearn, co-author of The Myth of Capitalism: Monopolies and the Death of Competition and board chair of the Predistribution Initiative.
The podcast is episode one in a special three-part series in association with the Predistribution Initiative as we explore the layers of Influence in the capital markets value chain, incentives, portfolio construction, and financial analysis practices at the asset owner and allocator level that cascade down to the rest of the economy.
This episode explores how the market structure has changed over the past decades to become more institutionalised. While institutional investors have been able to take advantage of their size to negotiate improved corporate governance reforms from companies, they are also under pressure to efficiently deploy large sums of capital, contributing to asset manager consolidation and, therefore, corporate consolidation. Such consolidation can have several negative impacts, such as squeezing out diverse and emerging fund managers and SMEs, monopsony dynamics, reduced innovation, and erosion of the quality and affordability of goods and services, and poor investment diversification opportunity, which in turn contributes to procyclical investment behaviour and increased systematic risk. The episode concludes with ideas for how institutional investors can de-consolidate their capital flows to contribute to a healthier real economy and market.
All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.