sonali: by the way, we had this big story about blackrock, vanguard, state street, and their impact onts. do you think regulators are going to take a look at this at some point? jim: it is a real risk. they now own together collectively 23% of every major company in the united states. that, given the pace of outflows from active and the inflows into passive, i see that reaching 26%, 27% in the next two or three years. frankly, i don't think it is about anti-competitive pressures. morenk it is probably about what is happening to the rest of the active managers, what are the competitive pressures on them. there's 100 50 fund families that own 92% of u.s. equities. them?s going to happen to how are they going to adjust their models that charge 60, 70 basis points, verses three to 10 basis points? vonnie: outside the u.s., japan was the most targeted non-us jurisdiction. france and germany were also particularly rich targets. we have to leave it there, but our thanks to you as always, jim rossman of lazard, and our own sonali basak. coming up, tensions have run hot between the united state

of the various risks resulting from passive funds increasing ownership of the largest firms blackrock vanguard and state street combined own 18 percent of apple's shares up from 7 percent at the end of 2009 so they're owning more and more of the largest companies and the largest companies like apple or microsoft become bigger and bigger percentage of the s. and p. 500 and they become too big to fail these 3 funds are too big to fail member one the money markets were too big to fail back in 2008 so what are the extraordinary measures that like for example that are happening in the repo market we don't know what the causes could it be connected to this it could be just as valid as any hedge fund or or any bank going under as well we don't know. because we're supposed to read the market but because of all this reflexivity we don't know who drive what came 1st the chicken or the fed in the case of apple because you have so much concentration in these funds and as you point out the market does reflect the concentration of apple in the index so these passive index fund. as are required to have the a

the work of blackrock and vanguard is really sort of coming into bear. if you think about who picks the boards, it is the shareholders. go back to how these companies are being founded, who is behind them. we need to start at that earlier stage level. bringing more diversity under your board two years, three years, four years before you go public is going to help the company be more ready to be public. it is really win-win. taylor: what do you think when you take a look? >> a key part, this is the equivalent of blackrock or vanguard saying they are not going to vote for the boards anymore. now you have this line in the sand for ipos. companies are thinking what they need to do two or three years from now to go public. i think goldman learned something from we work. they were a part of that. they came to the market without a diverse board. people started asking questions. pretty soon, there is no ipo. taylor: who is next after goldman? who do we expect to come out next? and asked both jp morgan morgan stanley, they are not volunteering. citigroup put out

there is where we could have really big change when you look at blackrock, vanguard, state street. wn 22% of the s&p 500, so that is a really large voting block that trumps any activist investor pushing for a similar goal. blackrock itself owns 6% of the big energy companies. there's a lot of room, but we don't have a lot of the details on exactly how larry fink plans to pursue this. for now, we just have the general, that they will divest from some of these higher sustainable risk companies. alix: thank you for that. still with me on set is lauren goodwin to of new york -- is lauren goodwin of new york like investment. there's only so far they can actually do anything versus their passive funds. how do you look at this shift? of investment,a and we are moving in the same direction, of paying attention to principles in terms of investing is an important part of the shift. one of the reasons it is hard to find these investments is how we measure what is sustainable, what is a good governance principle, is challenging. the more that investors demand this type of risk mitigation and th

we have had half a dozen fund managers, including blackrock vanguard, say that they are ownership go companies starting on april 1. and of course this is also something, this deal includes some chinese firms. the u.s. said that it would consider expeditiously pending requests from cicc, china reinsurance group, and committed to nondiscriminatory treatment of payment providers such as union pay. so there is something for everyone here, but of course the global giants who have been waiting for decades for full ownership in the china market, this is a pretty big day for them. shery: and of course this all comes at a great time for china, when the economy seems to be slowing down. what are the expectations for how much money could be injected into that economy? lucille: yeah. china has certainly seen its current accounts basically go towards the deficit. and it is looking for foreign inflows. we have had some estimates of how much money could flow in. bloomberg intelligence estimates that four security firms in commercial banks, they are looking at maybe $9 billion in profits by 2030. in

i think the work of state street, blackrock and vanguard is coming in to bear.f you think about who picks the board, it is the shareholders. go back to jeff's earlier point to how these companies are being first downed, who is behind them. we need to start at that level. and by the way, bringing mauer diversity on to your -- more diversity on to your board two or three or four years before going public is going to help the company to be public. it is a win-win. >> a key part of this is this is sort of the equivalent of plaque rock or vanguard saying we are not going to vote four boards anymore. now you have this line in the sand for the i.p.o. companies are thinking what i do need to do two or three years from now when i want to go public. i had better think about it now. they learned with we work. it was a disaster. they came to the mark without a diverse board and people started asking questions and pretty soon there is no i.p.o. >> who is next? first there goalman. what about j.p. morgan and morgan stanley. >> we had stick put out some -- wid city group put o

. >> my favorite part of the story is blackrock and vanguard pulled in two thirds of the industry's totalought in $116 billion. state street only added $24 billion. can you imagine the differential? scale really matters in this industry and these all types of e.t.f.'s. but there are some quarters last year where blackrock pulled in more money and fixed income e.t.f.'s which bring in less in fees. david: that's what i'm curious about. size matters but by definition, people are going to e.t.f.'s because they don't want to pay very much money to manage them. >> exactly. that's a big question in the industry. if you go to goldman-sachs, they have a lot of products so does j.p. morgan. so how do you compete with a blackrock? and then you have morgan stanley which who says we're going to avoid these products and pull in more higher fee, you know, assets. david: work on the margin rather than the volume. >> exactly. david: coming up here, the tale of two dollar indices. we'll look at how two measures of the dollar could diverge in the traders stake. tune into bloomberg radio heard across the uni

they are going to be competing with blackrock and vanguard, and part of the challenge will be buildingnd they will have competition from domestic players as well and need to get those licenses in place the company has a lot of cash on the balance sheet, and we did talk about dealmaking. made two deals last year and the u.k. and one in brazil with a 4% stake. and also the 4% stake in china as well, so we discussed whether they will pull the trigger on , and they said valuations are looking quite steep and they will be more conservative but certainly they have the cash pile to make more acquisitions this year. and this is an environment where interest rates remain very low. that is a pressure point for this company. he says that will be the new normal. so organic growth will grow the business and they will focus on building things out in china. shery: tom mackenzie, thanks. the morgan stanley annual global investment conference has kicked off in hong kong. bringsvate event together top fund managers and investors to discuss strategy for the year ahead. let's go to hong kong and our chief

vanguard is a notable exception. someig index fund firm, of the biggest in the world had been glaring omissions from this group. with blackrockng now that might be more pressure on the likes of vanguard to get on board as well. amanda: we have corporations and investors -- not so political. will this force more policy in this direction? annie: i think it's a symbolic move. the idea is to get more large asset managers voicing their concerns about the kind of andis -- climate crisis causing change within the companies. one point activists have brought up is that asset managers are not doing enough to years or shareholder vote and to use their powerful voices to demand more change around climate change. that is part of the reason for this. youra: great to have thoughts on this. your function is tv . this is bloomberg. ♪ beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping bu

now that blackrock has taken this step, the ball is really in their court for what they do next. the question is how vanguardthers may follow as well. amanda: one of the interesting aspects, it feels like a good investors, corporations are in front of policymakers and policies. we are seeing environmental policies go the other way, and you have one of the leading money managers in the world saying we take it seriously. is that a strange disconnect to see in the capital markets? annie: it is. he mentions the government has a huge role to play here and it cannot only be done by corporations. but as he has mentioned in earlier annual letters, he has said that people are increasingly looking to corporations to step in where governments are failing. this could be a really strong example of one of those situations. shery: are there any concern that this may hit the returns? annie: one criticism that you see over esg investing is will this affect returns? what you are seeing here is such a demand for these products still out there that it is not really affecting blackrock's opinion on whether or not they should exi