BlackRock and Vanguard hold shares in most large American companies, for the people invested in their funds.
This story follows who owned the two firms themselves, from 1974 and 1988 to today, then lets each side of a debate about their reach speak in its own words.
Every line drawn below is a sourced link, and every quote is the speaker’s own words. A connection is not evidence of wrongdoing.
BlackRock has its head office at 50 Hudson Yards in New York; Vanguard’s is in Malvern, Pennsylvania. Through their funds, both hold shares in many of America’s largest companies, for the people invested in those funds. So who owns the two firms themselves?
24 Sep 1974
John C. Bogle joined Wellington Management in 1951 and became its president in 1967. In January 1974 its board voted him out as president. That September he incorporated Vanguard to run the Wellington funds’ administration; it began operations in May 1975.
The strange bedfellows, who had fallen from whiz-kids to goats in just seven years, had a falling out, and my Boston partners mustered the power to fire me as President of Wellington Management Company on January 23, 1974.
31 Aug 1976
Bogle set Vanguard up to be owned by the funds it runs, and so by their investors. In August 1976 he launched First Index Investment Trust, now Vanguard 500 Index Fund, for individual investors. That fund provides about 14% of Vanguard’s capital.
The idea was simple in concept: the funds would now manage themselves, with an eye solely on the interests of their shareholders, rather than entrust the management role to an external company seeking profit for itself.
1988
Larry Fink left First Boston and, with seven colleagues, formed Blackstone Financial Management with Blackstone, the firm Stephen A. Schwarzman and Peter G. Peterson had founded. Blackstone gave it a $5 million credit line for half of the business, according to the book King of Capital.
We started in business together. We put up the initial capital.
28 Feb 1995
The firm took the name BlackRock in 1992. In June 1994 Blackstone agreed to sell it to PNC, a Pittsburgh bank, which completed the purchase, for about $240 million, in February 1995. Schwarzman later called the sale a heroic mistake.
That was certainly a heroic mistake
1 Dec 2009
BlackRock listed in October 1999, with PNC keeping 70%. In 2006 BlackRock took over Merrill Lynch’s fund business, giving Merrill Lynch 49.3%. In 2009 BlackRock bought Barclays Global Investors, maker of iShares, for $15.2 billion, giving Barclays 19.8%.
Jun 2020
In June 2011 BlackRock bought back the last shares held by Bank of America, which had taken over Merrill Lynch. Barclays sold all of its shares in May 2012, and PNC sold its 22% in May 2020.
Mar 2026
Among the largest holders in March 2026 were Vanguard Capital Management, a Vanguard subsidiary, with 6.87%, held mostly for Vanguard funds, and the Kuwait Investment Authority, with 5.14%, held for the Government of Kuwait.
This Schedule 13G includes securities held by Vanguard funds, or sleeves thereof, over which Vanguard Capital Management LLC exercises dispositive power, in addition to securities held by clients
Mar 2026
Through their funds, each firm holds roughly 5% to 8% of companies such as Tesla, Microsoft and Amazon, for its clients: mostly the people invested in the funds, who get the gains and losses. A third big manager, State Street, reports hundreds of millions of shares in Microsoft and Amazon the same way. The firms manage the shares and vote part of them.
They have made broadly diversified index portfolios accessible to even the smallest investor, serving to help reduce complexity, lower costs, and provide a degree of protection against overexposure to the risk of individual stocks.
Mar 2016
When the same few investors hold shares in competing companies, economists call it common ownership. In the Harvard Law Review the law professor Einer Elhauge argued that such holdings make competitors compete less, and that they can break antitrust law.
An economic blockbuster has recently been exposed. A small group of institutions has acquired large shareholdings in horizontal competitors throughout our economy, causing them to compete less vigorously with each other.
Apr 2017
A study by Jan Fichtner, Eelke M. Heemskerk and Javier Garcia-Bernardo found BlackRock, Vanguard and State Street together to be the largest shareholder in 88% of S&P 500 companies, siding with company management in more than 90% of votes.
We comprehensively map the ownership of the Big Three in the United States and find that together they constitute the largest shareholder in 88 percent of the S&P 500 firms.
May 2018
Studying U.S. airlines from 2001 to 2014, José Azar, Martin C. Schmalz and Isabel Tecu reported fares 3% to 7% higher than if the airlines had been separately owned. They called reduced competition a hidden social cost of diversification.
we find that airline ticket prices are 3% to 7% higher due to common ownership, compared to a counterfactual world in which firms are separately owned or in which firms ignore the anticompetitive incentives of their owners due to common ownership
29 Nov 2018
Bogle wrote that if index funds keep growing, the three biggest might own 30% or more of the U.S. stock market, a concentration he did not believe would serve the national interest. He added that their enormous value should not be ignored.
I do not believe that such concentration would serve the national interest
15 Jan 2019
In 2017 BlackRock called the evidence fragile. In a 2019 letter to the U.S. Federal Trade Commission it cited Analysis Group, a consultant it hired, which reported that with two of the study’s assumptions changed, the link to fares lost statistical significance.
When the aforementioned erroneous assumptions are corrected, Analysis Group finds no statistically significant relationship between ‘common ownership’ and airline ticket prices.
1 Feb 2021
In a letter to the same agency, Vanguard called common ownership an unproven hypothesis, and said the advisers of its funds do not make investment decisions in coordination with other investors.
The common ownership concept is an unproven hypothesis that should, at a minimum, be studied in greater depth before becoming a part of the rules implementing the Hart-Scott-Rodino Act
Sep 2021
In a working paper, Azar and the economist Xavier Vives reported that common ownership by BlackRock, Vanguard and State Street went with lower airline prices, and common ownership by other shareholders with higher ones.
We also find that common ownership by the “Big Three” (BlackRock, Vanguard and State Street) is associated with lower airline prices, while common ownership by shareholders other than the Big Three is associated with higher prices.
Sep 2022
In the same journal, Patrick Dennis, Kristopher Gerardi and Carola Schenone reported that the link between common ownership and fares came from the airlines’ market shares, not from who owned them or who controlled them.
This paper reevaluates this evidence and shows that the documented positive correlation between common ownership and airline ticket prices stems from the market share component of the common ownership measure, and not the ownership and control components.
Sep 2022
Azar, Schmalz and Tecu answered that ownership changes do predict price changes. Tecu had already written that such studies do not show that no such effects exist, and Elhauge had answered an earlier draft.
Contrary to DGS’ claims, ownership changes do predict price changes once one constructs a valid placebo that actually separates the variation from market shares from the variation in ownership.
Mar 2026
A 2020 study for the European Parliament called it still an open debate whether common ownership helps or harms competition. Every line here is a sourced link: open the explorer to follow any of them.
To conclude, whether and in which circumstances common ownership is beneficial or deleterious for competition, innovation, and, ultimately, citizen welfare is still an open debate.