Republican presidential candidate Vivek Ramaswamy’s asset management fund has surpassed $1 billion in assets.
Ramaswamy’s Ohio-based firm Strive calls itself “anti-woke” and “anti-ESG”—meaning that it doesn’t consider environmental, social, and corporate governance factors when investing. “Our rapid growth demonstrates investors want corporations that focus on maximizing value and prefer a shareholder capitalism approach over ESG and stakeholder capitalism,” Strive CEO Matt Cole said in a press release yesterday (Sept. 5).
While some clients might be attracted to the fund’s anti-activist stance, part of the success should also be attributed to the firm’s co-founder, the 38-year-old Ramaswamy.
Ramaswamy, the multimillionaire who made a splash in the first presidential debate isn’t the frontrunner by any measure. He is polling at just over 8%, good for third place behind Florida governor Ron DeSantis (14.6%) and ex-president Donald Trump (52.1%). But Ramaswamy’s fund has been growing along with its co-founder’s name recognition. By June, Strive’s assets under management crossed $750 million. And mere months later, it’s crossed the billion-dollar mark.
Quotable: Strive’s presidential push
“It is a rare feat for any indie issuer to hit $1 billion in first year, let alone one that is largely a pushback to ESG as many of those ETFs have flopped. Ramaswamy’s wealthy backers helped a lot and running for president probably can’t hurt either. That is some unchartered territory when it comes to ETF marketing.”
‘Anti-woke’ Strive as a presidential launchpad
Criticism of sustainable investing is nothing new (it dates back decades) but in recent years it’s gained renewed traction—even BlackRock’s Larry Fink, a poster boy for purpose-driven investment, has backed away from the term ESG. Very few funds actually wave the anti-ESG banner in practice—27 in total, according to Morningstar, and most of them are just two years old.
Ramaswamy’s fund, launched in 2022, is backed by billionaire investors Peter Thiel and Bill Ackman. It has grown despite legal trouble from former employees suing Ramaswamy and his co-founder Anson Frericks for mistreating staff and pushing employees to violate securities law.
“Strive was founded largely as a PR mechanism for the presidential campaign of Ramaswamy,” said Christopher Lenzo, a lawyer for one of the plaintiffs suing a former sales and distribution partner of the firm. “Not a lot of thought was given to running it as an investment firm.”
One big number: Strive’s hype is dying down
$300 million: How much Strive’s first fund—Strive US Energy ETF—attracted in its first three weeks, accounting for more than 80% of the $377 million total inflows into anti-ESG funds during the third quarter of 2022, according to a Morningstar study. The second, however, Strive 500 ETF STRV, picked up just $33 million in its first month on the market, and less than $5 million on average per month for the next since months.
Company of interest: Roivant Sciences
Before entering the hedge fund world, Ramaswamy was a biotech entrepreneur. In 2014, the Harvard- and Yale-educated child of two Indian immigrants founded Roivant Sciences. The “Roi” in Roivant is for ROI—return on investment—and, at first, the company delivered. But the company’s stock rose on an Alzheimer’s drug, which triggered its fall from grace two years later when it failed in clinical trials. The company has since moved on to a more diverse range of drugs.
In recent days, Roivant Sciences has moved to distance itself from Ramaswamy after he called the US Food and Drug Administration “corrupt” and said it should be gutted. “Vivek’s views on FDA are different than my personal views on FDA and different than Roivant’s views on FDA,” Roivant CEO Matt Gline told the Financial Times on Sept. 3.
Ramaswamy handed Gline the CEO reins in 2021 and stepped down as the company’s chair to run for president earlier this year. However, he’s been cashing in Roivant shares in order to fund his campaign. The day before entering the race, he sold 4 million shares of Roivant, worth $32 million in cash value before taxes. And he could cash in much more if he wants: the filing indicated Ramaswamy still owns more than 54 million shares.
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