The diversification cost of large, concentrated equity stakes. How big is it? Is it justified?

While the hypothesis that ownership concentration can aect the value of a company has seen a lotof empirical study, little light has been shed on a complementary problem, that these concentratedowners have a cost of their position due to an undiversified portfolio. Using a unique data set ofthe actual diversification of all Norwegian equity owners, we show that the largest owners of acorporation in fact have very undiversified equity portfolios, and that such owners have significantcosts to their concentrated portfolios...