The Project on Investment, Ownership, and Control in the Modern Firm is the Millstein Center's cornerstone research project, which will offer the first comprehensive analysis of the identity, incentives, and influence of the institutions emerging as owners in the newly fragmented world of equity finance.
The project will provide the first comprehensive analysis of the institutions emerging as owners in the newly fragmented world of equity finance.
Business enterprise has always depended upon providers of equity. The study of the sources of equity in the U.S. historically has focused on individual investors. More recent work has recognized the role of institutions, such as pension and mutual funds, in providing equity capital to modern firms.
The last decade, however, has witnessed an unprecedented fragmentation of economic and legal rights across a diverse group of new owners. Some of the largest institutional investors now think of themselves as “asset managers,” for whom equity in public corporations plays only a limited role in a broader investment portfolio. Other newly important institutional investors are styled as hedge funds. These funds vary in strategy from computerized high-speed trading to value investing, and have distinct approaches to participating in the governance of their portfolio companies.
Taken together, these developments have left academics and regulators alike with an inadequate understanding of the influence of these owners over the governance—and performance—of the modern corporation.
The project’s work will include: