One of America's top activist investors is leaving his $16 billion hedge fund to start a socially responsible investment firm — and it represents a broader push toward stakeholder capitalism
- One of the country's top activist investors Jeff Ubben announced he's leaving his $16 billion hedge fund ValueAct, the Financial Times reported.
- He is leaving to start an
ESGfirm, an investment organization that focuses on a company's environmental, social, and corporate governance performance to determine future profitability.
- The new hedge fund is called Inclusive Capital Partners and will be co-led by investor Lynn Forester de Rothschild, who's focused on socially responsible capitalism in the past.
- Ubben said American investors think too much about the short term (a view he once championed) and that it's time to change the financial model to focus more on the long term.
- He told the Financial Times, "Elizabeth Warren is right," referring to Warren's statements that a handful of institutions in tech and other sectors have a monopoly on business.
- He believes impact-focused activism aimed at older legacy companies can drive bigger profits than traditional activism.
- Ubben's move is part of a larger trend of top business and financial leaders saying that the role of a company isn't just to make profits for shareholders, but to benefit society at large.
- CEOs like JPMorgan's Jamie Dimon and Walmart's Doug McMillon declared in 2019 their move from shareholder primacy to a more inclusive capitalism.
- The percentage of investors that applied environmental, social, and governance principles to at least a quarter of their portfolios jumped from 48% in 2017 to 75% in 2019, BNP Paribas data shows.
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- This post is part of Business Insider's ongoing series on Better Capitalism.
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