are being bought not just by private operators, but by asset managers—financiers who invest the money of pension schemes, insurance firms, university endowments, sovereign-wealth funds and the rich. As a result, growing numbers of people live in what Professor Christophers terms an “asset-manager society”, in which “asset managers increasingly own and control our most essential physical systems and frameworks.
As the title of his new book, “Our Lives in Their Portfolios”, suggests, Professor Christophers finds this deeply troubling. Professional money managers, he says, are “relentless in squeezing maximum profits” from their assets. They cut costs, skimp on investment and raise rents wherever they can get away with it—and are now doing so for services like housing and water that people cannot do without.
And their influence is largely invisible, Professor Christophers writes, due to lax disclosure requirements, which makes analysis too much like “detective work”. Ultimately, despite the “terrific and tenacious” front men who convince governments to trust them with society’s essentials, asset managers’ “product is snake-oil, and their utopia a pure moonshine”.
The book’s argument is lively and studded with anecdotes. But it is undone by its flaws and inconsistencies. Investment firms’ increasing fondness for such assets is indeed striking. So far, though, they own a minuscule proportion of them. Professor Christophers estimates that, globally, around $1trn-worth of housing and $3trn-worth of infrastructure are in asset managers’ hands. These numbers sound big.
Given the author’s aversion to asset managers owning social infrastructure, his account of the costs of the phenomenon is surprisingly limp. Accusing such investors of “profit-maximising” is a “vanilla critique”, he concedes, as the pursuit of profit is hardly unique to them. But elsewhere in the book, their “relentless” cost-cutting and rent-hiking are key planks of his case.
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