Many believe that services such as housing, transportation, and health care should be public goods untethered to private capitalist structures of wealth accumulation and ownership. Yet these institutions of social reproduction are increasingly owned by asset managers, or financial intermediaries who act as fiduciary owners of “real assets” like housing and infrastructure. Essentially, asset management companies such as Blackstone, Brookfield, or Macquarie raise surplus capital from institutional and individual investors and allocate this money on their behalf to different so-called “asset classes,” which generate returns through a combination of income streams and financial engineering. The predictable result is that, as asset managers uphold the iron law of maximizing returns on investment, they make access to housing, health care, water, and transportation increasingly unaffordable. Return maximization also implies to delay capital expenditures needed to sustain such infrastructural apparatuses over the long term, while often tapping at the same time into taxpayers’ money used by the state to “de-risk” these private investments. On top of that, asset manager ownership restricts the state’s ability to plan and regulate land use in alternative—meaning, less financially profitable and more redistributive—ways, sidelining or blocking projects that might threaten the delivery of stable cash flows and the continual trading of assets from one fund to the other. Asset management, in other words, makes “all of our lives … part of [asset managers’] investment portfolios,” with direct consequences on everyday life, but often in ways that are obscured and thus more difficult to disrupt.

Geographer Brett Christophers’s Our Lives in Their Portfolios interrogates the ascent of asset managers in the global political economy. His book stands at the crossroads of two previous books that dealt respectively with the privatization of public land in the United Kingdom (The New Enclosure, 2018) and the development of “rentier capitalism” in the contemporary economy (Rentier Capitalism, 2020). His new study grows out of his realization that a specific set of capitalist actors repeatedly appeared across his inquiry on ownership and wealth-accumulation patterns: namely, asset managers. The book is organized around the pivotal idea of “asset-manager society,” which is “intended to denote the substance and significance” of the rising ownership of asset management companies in “our most essential physical systems and frameworks.” This conceptual proposition is grounded in recent scholarly debates around the post-’08 shift toward “asset manager capitalism.” Coined by the political economist Benjamin Braun, “asset manager capitalism” highlights a new “corporate governance regime” in which asset managers—particularly the “Big 3” involved in exchange-traded funds (namely BlackRock, Vanguard, and State Street)—have become powerful shareholders of numerous companies across the economy. While Christophers acknowledges the relevance of this analysis, he suggests that the specific involvement of asset managers in housing and infrastructure requires a new concept: asset-manager society.

The asset-manager society’s basic building bricks are funds, or the legal and financial entities set up by asset managers to collect money from institutional investors (such as pension funds, sovereign wealth funds, insurance companies, and investment banks) and acquire the assets on their behalf. As managers of investment funds that own real assets, these companies operate as rentiers: they extract the value that housing and other infrastructure generate through users’ fees (such as rent in housing, or water and electricity bills) or other forms of socialized payments (such as tax in the case of hospitals operated via PFI in the UK), as well as potential capital gains once they are sold. Part of this value is redistributed to their clients and to the banks from which they borrow to boost the return of the equity raised, while another part is kept to pay for their fiduciary services through fees and performance bonuses.

A “relatively novel historic phenomenon,” “asset-manager society” is the “child of broader political-economic shifts, relating in particular to the changing role of the state.” As Christophers writes, this “particular type of quintessentially late-modern, financial-capitalist ownership” emerged initially in the 1980s in the private equity sector, before expanding to housing, transportation, renewable-energy infrastructures, and crop farms. Indeed, asset managers were initially very marginal because of low institutional investment into real estate (except for nonresidential): institutional investors tended to stick to financial securities (equities, bonds), and the ownership of infrastructure and housing was state owned, or too fragmented between small landlords—not at scale for such investors handling billions. From 1990 to 2007, however, asset management grew significantly, originating in Australia for infrastructure and in the US for housing, but eventually moving toward Europe, especially in the UK where massive privatization programs unfolded. The 2007–2008 global financial crisis marked a turning point as banks were placed under new regulation, and low interest rates set by central banks pushed institutional investors to seek new investment outlets. Coupled with an ideological consensus on the need for massive investment for refurbishing decaying infrastructure, this propelled a quick expansion of asset management into the work of social reproduction. Assets under management grew 20 percent per year from 2009 to 2019, and 13 percent for real estate. Such growth also expanded asset management’s geographical scope, as the UN and the World Bank’s advocacy for states to “de-risk” their investments extended asset managers their reach toward the global South.

Most of the money collected by asset managers originates from North America and Europe (and Asia-Pacific for infrastructure), where they are concentrated. While North America and Europe receive 50 percent of the investment into infrastructure, 10 percent of it goes to Latin America and Africa. By contrast, 70% of residential investments stay in North America (most notably to multifamily housing, but also single-family rentals and manufactured-housing communities), with Europe ranking second, where prominent markets such as Spain have allowed Blackstone and other opportunistic funds to capitalize on the burst of the real-estate bubble and buy portfolios of “distressed” assets for cheap. Offshore centers are part and parcel of this geography, since funds are frequently located there for tax purposes. Despite the opacity of the asset management industry, this mapping shows that it is an engine of accumulation with a global—but uneven—reach that mostly benefits North America and Europe—and within these, the few.

Much of Christophers’s critique provides a forensic deconstruction of the industry’s narrative. First comes the trope that the ownership of real assets by asset managers benefits their users and the government. Instead, Christophers demonstrates how asset manager ownership exacerbates the risks that are socialized, for example through contractual arrangements seeking to offset the lack of profitability through public compensation: such was the case of the PPP signed between Macquarie and Seoul Metropolitan Government, whereby the latter has paid $150 million to compensate investors’ losses due to ridership figures below projections. In addition, asset managers privatize the profits which they seek to maximize through rising revenues and diminishing costs. Besides the usual lot of housing evictions and rent increases, this translates into real life-and-death consequences: citing another study, Christophers recalls that patients of care homes in the US owned by private-equity funds have a 10 percent increase of mortality risk, in large part due to asset managers’ prioritization of profits over people.

Christophers aims to go further than the usual scholarly critique of financialization, however, which he finds to be “wrongheaded, and altogether too blunt.” For him, asset management’s distinctiveness is not so much that its protagonists profit through rent extraction—something that applies more generally to private property, including mom-and-pop landlords—but rather their short-termism. That is, they often resell their assets only a few years after they just acquired them. Contrary to the mainstream mantra that they are here to stay as long-term partners, then, Christophers observes an “intense churn, as managers buy residential or infrastructural assets of various sorts only to put them in the shop window and sell them on just a handful of years later—often to other asset managers, who then recommence the same cycle.” The main reason is the domination of the closed-end fund model, which is designed for short periods of investment. If the predictable income generated by real assets is frequently cited by asset managers as a pro, it would only be an end toward the ultimate means: enticing other investors’ appetite, and thus boosting capital gains by selling at a higher price. Hence asset managers are “glorified traders.” This doesn’t square well with the long-term investments that housing and infrastructure necessitate to accommodate people’s needs—especially not in the face of climate change, which requires planning and massive investment to attenuate and adapt the built environment, for example to retrofit housing or to build resilient infrastructure against extreme weather events.

As asset managers uphold the iron law of maximizing returns on investment, they make access to housing, health care, water, and transportation increasingly unaffordable.

The second part of the critique debunks the claim that asset managers represent the interests of “teachers, nurses and firefighters” (in Blackstone’s words), whose pensions they purport to safeguard. Christophers does the math to show that either in successful or failed investment schemes, asset managers always win by cashing in generous fees, while pensioners may end up with small returns ($40 extra per capita per year on average for a $300 million fund turning $390 million of profits) or lose their savings entirely. Furthermore, pension savings are highly uneven across social and geographical space: in the US, he recalls that the 20 percent wealthiest own 50 percent of all retirement savings. And while pension funds are a significant source of capital for asset managers, they are not the only one: Sovereign wealth funds, insurance companies, and banks provide a lot of the equity and have their own agendas. These latter entities are able to negotiate better terms with asset managers than pension funds, resulting in a lesser return on investment for pension managers. Put simply, asset management undercuts, rather than maximizes, workers’ pension earnings in the long term. “Asset-manager society” is henceforth conceptualized as a form of “fiscal extractivism,” which hinges upon tax evasion.

Christophers concludes his discussion with an examination of where the “asset-management society” might be headed. He notes that the disruption of the COVID-19 pandemic did not significantly alter the structure of ownership and ultimately renewed efforts for its expansion, notably in the global South. Likewise, he argues that the “twin” crises of housing and climate have also led to an expansion in asset manager control—in large part due to governmental failures to curb the involvement of asset management companies in the former and the ability of these same companies to lobby their way into programs related to the latter, like the Green New Deal. While the return of inflation may hike interest rates and halt asset managers’ growth, Christophers contends that the shift may very well benefit them for various reasons, including the mere fact that they own the infrastructure in the industries most affected (food, energy) or the industries that benefit from adjusting mechanisms (housing).

Geographer Desiree Fields has highlighted how financialization poses significant challenges to grassroots movements seeking to resist Blackstone and other asset managers, because the multiplication of intermediaries increases the spatial as well as cognitive distance. By deciphering one of the key intermediaries in the contemporary unfolding of such financialization, and dissecting its operating logics, Christophers’s book makes a timely contribution. Moreover, his inclusion of different “asset classes” allows for an encompassing analysis while also showing key differences—although these are more implied than explored—that may shape movement strategy. Likewise, the inclusion of farmland, wind farms, and other energy infrastructure is a welcome exception to the traditional urban/rural divide that structures the scholarship. By highlighting the significance of these real assets in late-stage capitalism, Christophers usefully (although implicitly) foregrounds the role of space in wealth inequalities and class politics.

For all of its strengths, however, the book’s analysis of “asset-manager society” still raises questions. The core proposition of the book is a welcome effort to update the framework of analysis by factoring in a key internal reorganization of finance, and to highlight its specifics when it comes to vital building blocks of society. Yet, it is not always clear how distinguishing between them furthers our analysis and understanding of their distinct power in the global capitalist economy. Christophers’s “asset-manager society” differs from Braun’s “capitalism” in a number of ways. First, the type of assets is different: “mainstream” asset management focuses on the stock and the bond markets, which are said to exist only as paper titles, whereas fixed assets like infrastructure and real estate “possess physical substance” and fall within the so-called “alternatives.” Second, and relatedly, “asset-manager society” involves a direct ownership of these fixed assets (or of a majority position in the company that operates them), as opposed to the “Big 3” involved in real estate as shareholders of companies listed on the stock exchange. Blackstone and other asset managers “control the physical asset” and thus “decide how the asset is commercially exploited: who electricity is sold to, whether road tolls should be increased, how farmland should be tenanted.” This translates into a “straightforward rule of thumb,” which equates the degree of control over fixed assets with their inclusion within the “asset-manager society.” Third, because of this, “asset-manager society” involves access to home, food, and energy; its impacts over people’s everyday life thus are “visceral” and “direct and continuous.” Fourth, “mainstream” and “real” asset management involve different companies, even though some do both. Above all, they are based on different business models: “real” asset management is presented as a complex collection of various income sources, but one which is highly profitable. According to Christophers’s calculations, Blackstone Real Estate would need fifteen times less of client capital under management to earn $1 of profit in 2020, compared to BlackRock. After all these differences, however, the nature of the distinction between “asset-manager society” and “capitalism” is still unclear. Is this a difference of essence, or degree? Is the former a subset of the latter? Or are the two parts of something larger? And if so, what exactly? The frontier between the two tends to blur in the last chapter, where Christophers frequently includes BlackRock in his discussion of “asset-manager society.”

Moreover, Christophers’s definition of “asset-manager society” contains some gaps, namely regarding its relationship to nonresidential real estate. Because nobody lives in office towers, malls, or logistic warehouses, and the rent paid by their tenants would “tend to affect us only indirectly and intermittently,” nonresidential real estate is not included in it. Granted, the involvement of asset managers in these different properties has perhaps less immediate consequences than when it comes to home evictions, but it still has a profound everyday impact on urban design, the location and type of jobs, and urban sprawl. For example, in France (the sixth-biggest market for commercial real estate according to MSCI-IPD), asset managers tendentially favor large, mono-use office buildings leased to large corporations, which implies their spatial concentration in space against mixed-used tenets of planning, and impacts public-space frequentation after office hours. The development of logistic warehouses is also a driver of urban sprawl, leading to losses in natural spaces and biodiversity. Nonresidential portfolios can be used by asset managers as a political-economic source of power to bargain with public powers on housing. In France again, real estate investment trusts (REITs) publicly threatened the government to suspend their $17 billion of investment in order to defeat a proposal that would condition their tax advantages to a quota of housing.

In fact, the status of REITs in “asset-manager society” is half convincing. As large owners of real estate (they manage $4 trillion of real estate in the U.S. alone, while the worldwide asset under management for funds stands at $4.1 trillion, REITs are arguably part of the “financial-capitalist ownership” Christophers writes about. But he only sees them as a legal tool of “fiscal extractivism” that asset managers action when they want to boost their revenues by using tax advantages that the status allows. However, REITs are actors in their own right, and what they do is essentially manage real-estate assets on behalf of their shareholders. And there are cases where, like funds, these shareholders are no one other than … institutional investors. Granted, they are companies that have a longer lifespan than closed-end funds, a different form of debt financing, et cetera. But at the end of the day, their practices are quite close. There were hardly any differences in terms of investment criteria, for example, between employees of asset management companies and REITs whom I interviewed in Paris. Some of these REITs’ employees also explained how they are now selling their buildings more frequently to generate capital gains—i.e., engaging in the same “asset churn.” Martine August, whose work is cited in the book, has shown that REITs in Toronto were engaging in the same “buy-fix-sell” strategies typical of Blackstone, for instance. Now, it may well be the case that this was done in a less aggressive way than closed-end funds—this would deserve proper discussion. While REITs’ inclusion in “asset-manager society” would not fundamentally alter Christophers’s story, it would be a more comprehensive one to be sure as many REITs engage in the same tactics as the funds he pinpoints.

Last but not least, the book is double edged in terms of counterpolitics. The “asset-manager society” narrative reads like an implacable process, with few maneuvers for resistance. There are examples of power struggles, such as internal tensions between institutional investors, which, like pension funds or life-insurance companies, need long-term investment opportunities to match their liabilities, and asset managers that keep on offering them short-term investment funds. Christophers also cites conflicts between asset managers and public officials, which often end up in legal disputes. But these remain scattered throughout the book rather than given a proper systematic discussion. Further, except for one mention of demonstrations against Blackstone in California, grassroots movements are also left out of the picture. Yet, in New York, Berlin, Barcelona, and in the Toronto area, residents and activists have engaged in numerous tactics against asset managers, from rent strikes to legal action, including blocking evictions. These movements also try to articulate their actions at the transnational level, such as the 2015 #StopBlackstone campaign that gathered protesters in the US and Spain, or in liaison with the former UN special rapporteur on adequate housing, Leilani Farha, who engaged in naming and shaming several large asset management companies. Even if these examples may often sound like the battle of David versus Goliath, they show that citizens are not victims passively experiencing rising rent and housing evictions. Their absence in Christophers’s “asset management society” raises an important question about the relationship between critical research on processes of social domination and initiatives to alter these, one which this book leaves wide open.

All in all, Our Lives in Their Portfolios is a thorough, critical examination of a key topic with far-reaching consequences. A dense essay on a crucial matter that may seem complex at first sight, it remains nonetheless quite accessible thanks to Christophers’s didactic prose and analytical organization, with many vignettes giving flesh to the story. It invites us to develop more analytical and political action targeted at those who have come to rule significant parts of the world by controlling the circulation of capital across an increasing range of everyday social spheres and spaces. 

Featured image: May 31st – Greenfaith – An interfaith delegation, including director Rev. Fletcher Harper, was arrested as they stood in front of BlackRock’s shareholder meeting to call on the multi-trillion-dollar asset manager to end its fossil fuel investments(2022). Photograph by Felton Davis / Wikimedia Commons