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Structure: Concentration and Ownership in the Pension Fund Management Industry

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Rent-Seeking in Private Pensions

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Abstract

One perspective argues that concentration in the pension industry is an artefact of voluntary corporate strategies to rationalise production techniques and routines and streamline management. While cogently articulated, this account has little relevance to the intense concentration of the private pension fund management industry. While the ‘single-purpose’ requirement restricts market entry to specially created pension fund management companies, the imposition of stringent capitalisation requirements circumscribes competition by imposing prohibitive financial costs. This chapter argues that the purpose of statutory measures to induce concentration is to diminish the exposure of incumbent managers to market forces, enabling them to generate income streams that exceed their operating costs substantially. These themes are illustrated, empirically, with reference to Chile and other countries.

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Author information

Authors and Affiliations

  1. Plymouth Law School, University of Plymouth, Plymouth, UK

    Mark Hyde

  2. Heinz School, Carnegie Mellon University, Pittsburgh, USA

    Silvia Borzutzky

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  1. Mark Hyde
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  2. Silvia Borzutzky
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Hyde, M., Borzutzky, S. (2016). Structure: Concentration and Ownership in the Pension Fund Management Industry. In: Rent-Seeking in Private Pensions. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-58035-1_2

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  • DOI: https://doi.org/10.1057/978-1-137-58035-1_2

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  • Publisher Name: Palgrave Macmillan, London

  • Print ISBN: 978-1-137-58034-4

  • Online ISBN: 978-1-137-58035-1

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

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