BEA defines “holding company” as a business enterprise which would be classified under industry code 5512, which are businesses engaged in holding the securities or financial assets of companies and enterprises for the purpose of owning a controlling interest in them or influencing their management decisions. Businesses in this industry do not manage the day-to-day operations of the firms whose securities they hold.

To be considered a holding company, income from equity investments must be more than 50 percent of total income. A business that engages in holding company activities but generates more than 50 percent of its total income from other activities is not a holding company.

Holding companies in an ownership chain that only includes private funds and/or other holding companies are considered to be in a chain with no “operating companies”—i.e. companies that are not private funds or holding companies.