This book looks at asset managers, the new capitalists that the author says “increasingly own and control our most essential physical systems and frameworks, providing the most basic means of social functioning and reproduction.”

July 3, 2024 Adam Almeida  JACOBIN

Asset management is an emerging part of the global financial system that has come to prominence since the great meltdown of 2008. Asset managers invest money on behalf of institutional investors — such as sovereign wealth funds, pension schemes, and insurance companies — to generate enormous profits for themselves and their clients.

In an asset-manager society, firms like Blackstone, Brookfield, and Macquarie act as the shadowy overseers of wealth funds that find a home in the assets that sustain human life, such as housing, energy, and transportation. The questions of how this came about, what the implications are, and who the ultimate winners and losers might be are all explored in brilliant clarity by Brett Christophers in Our Lives in Their Portfolios: How Asset Managers Own the World.

An Invisible String

When my sister-in-law told me that she had been offered a job in human resources for the City of Mississauga, I was extremely happy for her. She would be working for the municipal government of our Canadian hometown, where she would enjoy security of employment, robust benefits, and a healthy pension plan for when she retires. As I recently discovered while reading Our Lives in Their Portfolios, I had already been contributing to her retirement savings for years through a complex and obscure labyrinth of global capital flows.

The pension plan that covers my sister-in-law is the Ontario Municipal Employees Retirement System (OMERS), one of the largest public pension plans in Canada. As an institutional investor, OMERS has assets under management valued at Can$124 billion, with most of its exposure in private equity, infrastructure, and real estate.

One of the crown jewels of its portfolio is Thames Water, the private utility company that supplies me with drinking water in north London an ocean away. As OMERS is the largest shareholder in the company, the ever-growing water rates that I pay ensure that my sister-in-law will one day enjoy her golden years in retirement. Simultaneously, however, wastewater treatment plants owned by Thames Water suffer from a lack of investment that threatens to leak raw sewage into the rivers of the Cotswolds and the Chilterns.

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