Woke, Inc. author launches anti-ESG investment firm to push performance over politics
Companies engaging in ESG (environmental and social governance) activity are losing focus on their mission and are being led by a small number of large asset managers to act in ways that may not best serve investors or customers, according to a new investment management firm that plans to focus its investments on corporate excellence.
Strive Asset Management, which was launched by Vivek Ramaswamy this week with $20m (£16.4m) backing of investors including PayPal founder Peter Thiel and Pershing Square Capital founder Bill Ackman, will launch a suite of funds that use shareholder influence to steer companies away from political issues it feels don’t serve the main stakeholder – customers.”
“Look at Disney (DIS), is political division their primary goal or is their primary goal to provide excellent entertainment,” asked Strive head of corporate governance Justin Danhof. “Sixty percent of their customer base opposes what they are doing right now.”
What is your sentiment on DIS?
The Walt Disney Co. (NYSE: DIS)
'Large-scale fiduciary breach'
Disney is currently in a spat with Florida Governor Ron DeSantis over a recent elementary education law some on the political left oppose and, as a result, may lose certain tax benefits for its flagship Disney World Resort in Orlando.
“If, as a company, you are listening to the squeaky wheel you aren’t serving your customers,” Danhof said.
The so-called ESG initiatives are being driven primarily by the three largest asset managers in the world: BlackRock, State Street and Vanguard, which collectively control over $20 trn in assets under management. “In the end, client views aren’t being represented and we are looking to stop this large-scale fiduciary breach.”
'Hypocrisy of ESG investing is galling'
Likening these three large asset managers influencing corporate governance decisions to the three largest oil companies conspiring to restrict supply, Danhof added “when the largest asset managers do this, we praise it as ESG investing. If Exxon Mobile (XOM) conspired with other top oil companies to keep oil in the ground and inflate prices, it would be the biggest anti-trust case ever.”
Investor-led ESG initiatives have led to significant, and potentially costly, governance changes at some of the largest companies. For example, an activist shareholder initiative resulted in beverage giant Coca-Cola committing to increased use of reusable bottles by 2030.
Other companies, however, have resisted shareholder pressure to alter operations due to ESG concerns. Retailer Costco Wholesale (COST), for example has resisted activist attempts to initiate a proxy vote mandating it pressure third-party suppliers to lower their respective carbon footprints.
“If packaging changes along Costco’s supply chain are good for its customers, we say go for it,” said Danhof. “The customer is the number one stakeholder.”
Exxon Mobile Corp. (XOM)
Diverse base of seed funds
Founded this week by biopharmaceutical entrepreneur and author Vivek Ramaswamy, Strive Asset Management is still in its incipient stages, raising seed funds from high net-worth individual investors, including Cantor Fitzgerald CEO Howard Lutnick, and musician and venture capitalist D.A. Wallach, as well as institutional investors Founders Fund, Narya Group and Flex Capital.
Ramaswamy founded Roivant Sciences (ROIV) in 2014 and subsequently stepped down as CEO in January 2021. Roivant is currently in the process of being acquired by blank-cheque firm Montes Archimedes Acquisition (MAAC). Additionally, Ramaswamy authored NY Times bestselling book ‘Woke, Inc.: Inside Corporate America’s Social Justice Scam’.
“We have diversity across the political spectrum in both seed capital and the people we are hiring,” added Danhof. “Our goal is to restore the voice of every-day Americans in corporate board rooms.”
“We respect there are other voices out there, we just think there are Americans who don’t agree with them.”