Manager backed by Thiel, Ackman to launch ETFs emphasizing excellence over politics
New firm looks to take on ‘ideologies of BlackRock, Vanguard, State Street
Clip by Pensions&Investments
By Kathie O’Donnell, May 12, 2022
An asset management firm launched Monday that seeks to “restore the voices” of everyday citizens within the halls of corporate America, expects to launch exchange-traded funds, according to its executive chairman.
Vivek Ramaswamy, a co-founder and the executive chairman of Strive Asset Management, said he believes that the largest asset managers today “don’t actually advance the best interests of their client” when it comes to how they vote their shares or advocate in corporate America on clients’ behalf.
He believes most Americans would like to see corporate America focus exclusively on delivering excellent products and services to their customers rather than on “divisive political or social ideologies.” Across the U.S. economy, some of the leading companies competing in various sectors have something in common, Mr. Ramaswamy said.
“In many cases today, among the top shareholders are the same three firms — BlackRock, State Street and Vanguard,” he said, adding that those firms, which together manage more than $20 trillion, “are all advancing this monolithic viewpoint that doesn’t represent the true diversity of underlying perspectives in the American economy.”
Columbus, Ohio-based Strive plans to launch its first product in this year’s third quarter, he said.
“And I’m also confirming for you that we will be in the business of launching ETFs,” Mr. Ramaswamy said. “I will stop short of saying definitively that our first product will be an ETF.”
Strive has raised more than $20 million “from some of America’s most prominent venture capitalists and entrepreneurs,” according to a news release issued Monday announcing the firm’s launch. Among those providing seed financing according to the release were PayPal co-founder Peter Thiel and Bill Ackman, founder and CEO of Pershing Square Capital Management.
Mr. Ramaswamy acknowledged that the three big asset managers have many advantages, but he believes his firm’s message will resonate with investors. Strive believes there is “a fiduciary gap that needs to be filled,” and that demand from everyday citizens “will ultimately be our greatest competitive advantage,” he said.
When talking to clients about how to allocate their portfolios, in addition to discussing things like risk and sector exposure, the conversation now will also have to include talk about voting and engagement exposure as well, Mr. Ramaswamy said.