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Portfolio Management Styles and Firm's Governance

Bertrand Jacquillat * Co-fondateur, Associés en Finance ; professeur émérite des Universités.Contact : bertrand.jacquillat@associes-finance.com.


The powerful setup of passive investing in the management of savings by institutional investors has tremendously increased in the last ten years. It is the result of the progressive recognition of financial markets efficiency as well as of the focus on the costs and results of active portfolio management. This evolution triggered worries regarding the monitoring of governance in firms in which these funds invest. However, the worries seem today overestimated since the largest passive investors like Blackrock have realized their social duty and increase the number of their employees in charge of monitoring governance. Nevertheless new governance issues arise with the growth of dual ownership structures in high-tech listed companies, the introduction of artificial intelligence - based monitoring and the huge rise of the Chinese financial markets.


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Footnotes

1   Pour une description exhaustive des ETF, voir Hamon (2013).

2   Sur ce point, voir également Edmans (2011).


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