U.S. institutional investor ownership of the U.S. equity market rose to 59.2%, or $7.9 trillion, of outstanding U.S. equities in 2003, up of from 51.8%, or $6.6 trillion, in 1999, according to the latest data in The Conference Board's Institutional Investment Report of U.S. institutional investor ownership and control.
"Activist public pension funds continue to amass relatively more control over companies," a Conference Board statement said. Their public pension funds'ownership of total equities rose to 9.7% in 2003 from 7.6% in 2000, the report said.
Institutional investors gained even greater control of the largest 1,000 corporations, the report said. In 2004 year-end, they owned 69.4% of the equity of these largest companies, up from 61.4% in 2000.
Pension funds owned 40.7% of total U.S. equity assets in 2003, investment companies 22%, insurance companies 23.3%, bank and trust companies 11.7%, and foundations 2.4%, the report said.
Since 1980, investment companies and mutual funds have grown the fastest (to 22% of assets in 2003 from 2.6% in 1980), followed by pension funds (to 40.7% in 2003 from 32.6%). In the same period, bank and trust companies have declined substantially (to 11.7% in 2003 from 38.8% of total assets in 1980).
U.S. institutional investors "controlled $19.634 trillion in assets in 2003, nearly matching their peak of $19.664 trillion in 1999," according to the report. "This means that, despite a brief hiatus, the economic power and clout of U.S. institutional investors continues," Carolyn Kay Brancato, director of The Conference Board's Global Corporate Governance Research Center, said in a statement. "These investors tend to be the most activist in demanding corporate governance reforms and will continue to have a profound impact on every company not only in the U.S. but also in global markets, since U.S. investors have tended to be out in front of global shareholder activism."
Conference Board officials couldn't be reached for comment.