Last week, Vanguard issued this statement announcing a plan to split its investment management and stewardship functions into these two wholly-owned investment advisors, perhaps to help manage its growth per this Morningstar piece:
- Vanguard Capital Management
- Vanguard Portfolio Management
Here are four things to know:
- Long Implementation Timeline – The restructuring is subject to further review and not expected to be completed until 2026.
- Two Different Stewardship and Proxy Engagement Teams – Each advisor will have its own investment management and stewardship team
- Possible Policy Divergence Over Time – No immediate divergence in policies is expected since both teams will be made up of existing Vanguard staff. But it’s possible that the centralized stewardship model may shift over time, potentially leading to distinct voting and engagement policies across the two entities.
- Beneficial Ownership Disclosures May Change – Those companies that have listing ‘The Vanguard Group’ in their beneficial ownership tables under Item 403 of Regulation S-K will need to update disclosures to reflect the new advisory entities once the restructuring is complete.
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