Institutional Investing

Some heavy wonkish numbers today.

The Conference Board, the non-profit organization best known for putting out the consumer confidence index, has put out a report on institutional investment in US corporations.

It says that over the last two decades institutions have consistently increased their holdings in the largest 1,000 US corporations. Twenty years ago, those corporations were 46.6% institutionally owned. By 2000, the figure was 61.4%. Now, it is up to 76.4%.

Institutional investors include pension funds, hedge or mutual funds, insurance companies, banks and foundations.

Of those variants, that with the most weight to throw around in the US capital markets and corporate suites is: the pension fund. Within that category, state and local pension funds have grown more rapidly than others.

This is important because the state and local funds are more inclined to activism -- and, for that matter, to litigation.

Further, it isn't just the growth of such funds that gives them more weight to throw around. Their internal allocation decisions are moving in the direction of equity. They've increased their share of equity markets from 2.9 percent in 1980 to 10 percent in 2006.

Carolyn Brancato, one of the authors of the report, said in a release: "As the more activist state and local pension funds not only grow in assets but also increase their equity base, they have more stock to vote at annual meetings and in proxy contests."

Meanwhile, in international news ... the U.S. pension funds have historically put very little of their assets into equities outside this country's borders. This amount has grown of late, though. The report says that the largest 25 internationally invested U.S. pension funds now (as of 2007, the latest available figures) allocate 15.3% of their assets that way. It was only 13.5% two years before.