Jamil Jivani: New ‘excellence capitalism’ movement is challenging woke investors

Excellence capitalism is a response to asset managers using their power to force business leaders to think like risk-averse politicians, rather than captains of industry

A clip from National Post

By Jamil Jivani, May 20, 2022.

To be free in any meaningful way, Canadians must be able to pursue a better life for their families without being vulnerable to asset managers forcing their businesses to become political organizations. This is the promise of a growing new movement known as “excellence capitalism.”

Vivek Ramaswamy, an entrepreneur and the author of “Woke Inc.,” is a man on a mission. Last week, he launched a company called Strive Asset Management to compete with the big three American asset managers: BlackRock, Vanguard and State Street.

According to its initial press release, Strive aims to establish excellence capitalism as “a new movement that leads American companies to focus exclusively on delivering excellent products and services to their customers, rather than mixing business with politics.” Strive is based in Ohio and has so far raised US$20 million (C$25.7 million) from PayPal co-founder Peter Thiel and hedge fund manager Bill Ackman, among others. 

Excellence capitalism is a response to asset managers using their power to force business leaders to think like risk-averse politicians, rather than captains of industry. Even the most freedom-loving CEOs and entrepreneurs may find themselves pressured by a relatively small group of activist investors to adopt ideological objectives that have little to do with actually making money.

On Thursday, for example, it was reported that Tesla, the manufacturer of environmentally friendly electric vehicles, was delisted from the S&P 500 ESG Index because it apparently did not meet S&P’s vague environment, social and governance (ESG) standards, to which Tesla CEO Elon Musk tweeted, “ESG is a scam.”

BlackRock is the world’s largest asset manager and perhaps the world’s largest proponent of mixing politics and business. Although it’s headquartered in the United States, the multinational corporation has significant influence in Canada: BlackRock is one of four firms that control 70 per cent of Canada’s $323 billion in exchange-traded fund assets under management, according to a report from National Bank Financial.

With its ability to make or break Canadian businesses, BlackRock is pushing companies to focus on “racial inequities.” It’s even doing a “racial audit” of its own operations. (Although BlackRock’s concerns about racism only seem to apply to countries like Canada, not to China.)

BlackRock throws its weight around to promote ESG standards that extend beyond the scope of a traditional business and into areas that ought to be determined by public policy. BlackRock voted in favour of nearly half of the environmental and social shareholder proposals in its investment portfolio during the 2021 proxy season.

Read the full article from National Post here.