Bill Ackman

Factual · Economics and markets

“As the biggest managers of index funds, they often cumulatively own 12%, and as much as 20%, of nearly every public company.”

Bill Ackman, Pershing Square letter author · January 2016 · Bill Ackman's Pershing Square Annual Investor Letter (2015 letter) (GuruFocus)

Vanguard, BlackRock and State Street often cumulatively own 12%, and as much as 20%, of nearly every public company.

Mostly true True in substance, wrong in a detail.

The second judge would not resolve this claim; the verdict shown is the first judge's.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

Judged as of January 2016. True if data (for example academic studies or 13F-based ownership analyses) show that Vanguard, BlackRock and State Street together typically held around 12% or more of S&P 500/large US public companies, with holdings reaching around 20% in some. Mostly true if the typical combined stake was about 10–14% with a maximum in the high teens to low 20s. Mixed if the figures held only for S&P 500 companies and not 'nearly every public company'. Mostly false if the typical combined stake was materially lower (for example under 9%) though substantial. False if it was far lower.

Evidence

1. Towards the Giant Three: The Rise and Rise of the Big Three Index Funds - ProMarket ProMarket (Stigler Center blog, University of Chicago), by Lucian Bebchuk and Scott Hirst · 16 July 2019

   “The average combined stake in S&P 500 companies held by the Big Three essentially quadrupled over the past two decades, from 5.2 percent in 1998 to 20.5 percent in 2017;”

2. These three firms own corporate America The Conversation · 10 May 2017

   “Together, the Big Three are the largest single shareholder in almost 90% of S&P 500 firms, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola.”

3. These three firms own corporate America The Conversation · 10 May 2017

   “We found that the Big Three, taken together, have become the largest shareholder in 40% of all publicly listed firms in the United States.”

4. Hidden power of the Big Three? Passive index funds, re-concentration of corporate ownership, and new financial risk† | Business and Politics | Cambridge Core Cambridge University Press (Business and Politics) · 4 June 2017

   “In recent years they acquired significant shareholdings in thousands of publicly listed corporations both in the United States and internationally.”

Reasoning

E1 (Bebchuk and Hirst) reports that the Big Three's average combined stake in S&P 500 companies rose from 5.2% in 1998 to 20.5% in 2017. That is consistent with a typical combined stake of 12% or more around January 2016, although the quote gives no figure for 2016 itself. E2 and E3 show the Big Three were the largest shareholder in almost 90% of S&P 500 firms and in 40% of all US-listed firms. This supports broad ownership but gives no combined percentage for 'nearly every public company'. The evidence is strongest for large S&P 500 companies and does not fully settle the claim for all public companies, so the verdict is mostly true rather than true.

Cite this claim

Bill Ackman, “Vanguard, BlackRock and State Street often cumulatively own 12%, and as much as 20%, of nearly every public company.” (said January 2016). Verdict: mostly true. Reliability API, claim c_3fd7e255b0d2, method 0.1.0+c876030c. https://epistacklabs.com/claims/c_3fd7e255b0d2