Giant US teacher's pension backs new female- and minority-led activist fund with $250 million

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A fledgling female- and minority-led activist hedge fund said Monday it had backing from the California State Teachers’ Retirement System, which has agreed to provide a $250 million investment for a six-year term.

The sizable — and lengthy — capital commitment from the largest educator-only pension will allow the firm, Impactive Capital, to begin investing. It was founded by Lauren Wolfe and Christian Asmar, who have 20 years of combined experience in activist investing and most recently worked at Clifton Robbins’ Blue Harbour Group.

Wolfe explained in a press release on Monday that the new fund’s strategy will be to make long-term investments while being engaged with management teams and boards to improve returns for shareholders by focusing on how they spend their capital and on their policies related to environmental, social and governance issues.

“The pendulum has swung too far toward a hyper-focus on short term results,” she said in the release. “Our strategy is unconventional. We take a longer-term view of our investments and improve capital allocation and ESG where it drives real value. We do this using a range of tools that we believe positively impact multiple stakeholders—shareholders, customers, employees— to create superior, sustainable returns.”

Socially responsible investing, long the bastion of faith-based activists and civic do-gooders, can now count several high-profile activists — including Robbins and Barry Rosenstein of Jana Partners.

Christopher Ailman, CalSTRS CIO said: “We are thrilled to be backing Impactive. Their compelling strategy aligns with our long-term investment horizon and our commitment to promoting good governance and sustainable business practices that enhance returns for our members.”

Assets under management in U.S.-based socially responsible investing strategies climbed to $12 trillion by 2018, roughly 25 percent of all investment under professional management and an increase of 38 percent from the start of 2016. Those numbers are published every two years by US SIF: the Forum for Sustainable and Responsible Investment, a Washington, D.C., trade group whose members include numerous pensions and mutual funds.

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