Vivek Ramaswamy’s fund manager Strive sticks to its ‘anti-woke’ mission
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When Vivek Ramaswamy, the crusader against “woke capitalism”, announced a run for president this week, he resigned from active involvement in Strive, the anti-ESG fund manager he founded.
His investors and co-workers are nevertheless pressing ahead with plans to provide an “anti-woke” alternative not just to index fund giants BlackRock and State Street but also to proxy advisers Institutional Shareholder Services and Glass Lewis.
Ohio-based Strive markets itself as a provider of exchange traded funds for investors who believe that companies have become too involved in societal issues such as racial equity and climate change. That cause has been taken up by some of the most visible Republican politicians, including Ron DeSantis, the Florida governor widely expected to make his own presidential run.
Strive’s financial backers include billionaire investor Peter Thiel and Howard Lutnick, the Cantor Fitzgerald chief executive. Both are big donors to Republican candidates. Hedge fund investor Bill Ackman, who mostly donates to Democrats, has provided funding for Strive and publicly backed Ramaswamy’s presidential campaign.
Strive has $600mn in assets under management in eight funds, almost entirely from retail investors. However, it launched an ETF for emerging markets, Ex-China (STXE), earlier this month that includes $100mn in seed money from an unnamed institutional investor, its first such backing.
Strive president Anson Frericks said it also launched a proxy advisory business last month. It will provide advice on voting on directors and shareholder proposals to investors who think ISS and Glass Lewis use too many environmental, social and governance factors.
“We’re on a much faster trajectory toward $1bn in assets than any other ETF start-up,” he said. “Strive’s mission is bigger than just one man.”
Strive’s largest fund, DRLL, tracks an index of energy stocks and promises to “mandate companies to focus on profits over politics/ESG”. It is up more than 10 per cent since its inception last August.
Strive’s index products are not the cheapest. DRLL charges 40 basis points, four times what State State does for a similar ETF, and STXG, its ETF that invests in 1,000 growth companies, charges 18bp, more than double Vanguard’s.
But Strive’s offerings are deliberately pitched to be within a basis point or two of BlackRock’s iShares. BlackRock has been the target of Republican boycotts over its climate change policies.
Before declaring his candidacy, Ramaswamy was a frequent attendee at gatherings of Republican state treasurers and other officials with power over state investments, including pension funds. He spoke about his belief that large companies have too much power over politics, but critics said he was trolling for business for Strive.
“He is trying to use the culture wars to personally profit,” Andrew Behar, chief executive of As You Sow, which files shareholder proposals on behalf of investors, said of Ramaswamy. As Republican-controlled states have pulled funds from BlackRock over ESG investing, Ramaswamy saw an opportunity to benefit, Behar said: “This is the new brand of Republicans — to tell investors how to invest.”
Before Ramaswamy stepped down, Strive announced plans to target Chevron and Home Depot in the 2023 proxy season. It seeks to reverse Chevron’s aspirational target for reducing the emissions of its supply chain and customers and to roll back Home Depot’s plans for a racial equity audit. Both measures were requested by shareholders in prior proxy seasons.
Matt Cole, Strive’s chief investment officer, said the group will ramp up its activity as more companies begin holding their annual general meetings. Strive does not use proxy advisers and has about 10 people on staff plus 10 contractors who analyse proxy ballots and decide how to vote its shares, Frericks said.
Ramaswamy remains a significant shareholder in Strive, which is a private company. Earlier this month he sold $32mn of shares in Roivant, the biotech company that made him a multi-millionaire*. He also stepped down from the board of the company this week. He did not return a request for comment.
*This story has been amended since initial publication to correct a reference to Ramaswamy’s net worth.