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Imagine a world in which two asset managers call the shots, in which their wealth exceeds current U.S. GDP and where almost every hedge fund, government and retiree is a customer. It's closer than you think.
BlackRock and Vanguard - already the world's largest money managers - are less than a decade from managing a total of $20 trillion, according to Bloomberg News.
Amassing that sum will likely upend the asset management industry, intensify their ownership of the largest U.S. companies and test the twin pillars of market efficiency and corporate governance.
None other than Vanguard founder Jack Bogle, widely regarded as the father of the index fund, is raising the prospect that too much money is in too few hands, with BlackRock, Vanguard and State Street together owning significant stakes in the biggest U.S. companies.
"That's about 20% owned by this oligopoly of three," Bogle said at an appearance at the Council on Foreign Relations in New York. "It is too bad that there aren't more people in the index-fund business."
Vanguard is poised to parlay its $4.7 trillion of assets into more than $10 trillion by 2023, while BlackRock may hit that mark two years later, up from almost $6 trillion today, according to Bloomberg News projections based on the companies' most...