Note: Supporting data and corporate contact information can be found in the Excel document, “InstitutionalOwnershipData.”
Two companies control the majority of America’s private prisons and immigration detention centers. CoreCivic (formerly Corrections Corporation of America) and The Geo Group, Inc. They are both publicly traded companies on the New York Stock Exchange, with the vast majority of shares owned by financial institutions.
10 Burton Hills Blvd.
Nashville, TN 37215
Market Capitalization: $3.1 Billion
Total Outstanding Shares: 118 Million
Shares Owned by Institutions: 102 Million
Institutional Holdings: 86.1%
The Geo Group, Inc.
621 NW 53rd St.
Boca Raton, FL 33487
Market Capitalization: $3.26 Billion
Total Outstanding Shares: 122 Million
Shares Owned by Institutions: 117 Million
Institutional Holdings: 96.1%
Major Players Behind CoreCivic & The Geo Group
Both companies depend on 6 major banks who provide debt financing in the form of revolving credit, term loans and bonds. Banks profit by collecting interest and fees on outstanding debt, currently in excess of $3 billion. These banks are:
Bank Of America
Debt financing is a critical tool employed by CoreCivic & The GeoGroup to expand control of the nation’s private prisons and immigration enforcement systems, as well as fund day-to-day operations with little cash reserves. Over the lifetime of extending credit to both companies, these 6 banks will receive over $1 billion in interest payments.
As noted above, more than 90% of shares in CoreCivic and The GeoGroup are owned by institutional investors. For example, Vanguard Group Inc. owns 16% of Core Civic and 18.5% of The GeoGroup, Blackrock Inc owns 9% of CoreCivic and 11% of The GeoGroup, etc.
It is worth noting, however, that although institutional investors own an outsized percentage of both companies, the stake in these companies as a percentage of total assets under management is negligible. (e.g. Vanguard’s stake in CoreCivic constitutes .01% of their AUM, Blackrock’s stake in The GeoGroup amounts to .0063% of their AUM, etc.). Put another way, although institutional investment is vital to the sustainability of both companies, they're far less vital to the sustainability of the institutions that keep them afloat.
Faced with the prospect of retaining their stakes in these two companies, or divesting themselves in response to a mass-withdrawal of individual investor portfolios, my money’s on the latter.
The “Institutional Analysis” tab of the spreadsheet goes into more detail, but the major institutional shareholders of CoreCivic and the GeoGroup are:
Vanguard Group, Inc
Cohen & Steers, Inc.
Daiwa Securities Group, Inc.
Millenium Management, LLC.
(There are others, including JPMorgan Chase, Prudential Financial, etc.)
Steps Toward Divesting / Investing
Follow the Money.
For-profit prisons need credit financing and support of major shareholders to survive. If your money is housed at any of the above financial institutions, or you’re part of a pension fund tdoing business with these institutions, your hard-earned dollars end up providing the capital needed to fund CoreCivic and The GeoGroup.
If you believe in the mission of for-profit prisons, I suggest:
1) Moving your money to the banks and institutional investors listed above.
2) Encourage other financial institutions to support these companies.
3) Start spreading the word via social media, especially Twitter. Tag the companies themselves in your messaging. #investinprisons
If this doesn’t sit well with you, I suggest:
a) Consider moving your money elsewhere. Don’t forget to tell your broker why.
b) Research whether or not your pension plans invest in for-profit prisons either directly or through the companies listed above. If they do, organize campaigns amongst your co-workers to encourage divestment.
c) Contact the corporations listed above, and share with them your thoughts on their financial relationships with for-profit prisons. Contact numbers are listed on the “Contact Information" tab of the this spreadsheet.
d) Start spreading the word via social media, especially Twitter. Tag the companies themselves in your messaging. #divestfromprisons