Posted on July 29, 2020

If Culture Matters, Should Your Asset Managers’ Political Donations Matter?

Angelo Calvello, Institutional Investor, July 27, 2020

“Culture matters.”

How many times have you uttered this phrase when talking about your own company or your manager due diligence process?

Asset managers certainly recognize this and loudly tout their own cultures as being essential to their success. Asset allocators — and especially investment consultants — cling to this phrase as if it had totemic power, ascribing to a manager a mystical ability to generate alpha.

Willis Towers Watson, for example, writes, “In the competitive world of generating alpha, we believe culture is a unique ingredient and the bedrock on which a competitive advantage is sustained over the long term.” But in spite of its importance, the firm admits, “evaluating [a manager’s] culture is not easy. It can require countless hours speaking to a firm’s leadership and staff, in addition to data gathering and analysis to create a robust view of the firm.”

Which takes us, inevitably, to President Donald J. Trump.

In 2020 this data-gathering exercise should also include a search and evaluation of political donations made by a manager and its leadership to the president’s re-election campaign.

Michelle Goldberg recently wrote in The New York Times that President Trump “does indeed have a re-election message, a stark and obvious one. It is ‘white power.’”


For those choking on this statement, I acknowledge that racism is detected, determined, and observed through partisan and ideological lenses — but I ask you to read the public record and then try to make a cogent counterargument (start with birtherism).

Which takes us back to culture matters: If an asset manager’s “principal assets are its people and the judgments they make,” then how people act in their private lives cannot be entirely divorced from and should be part of an allocator’s culture calculus.

Trump provides us with a new, valuable qualitative data point in the manager evaluation process: the political donations of the manager and its key employees.

The beauty of political donations is that they are public expressions of a person’s private views. Unlike participation in the Boogaloo movement (not all Hawaiian shirt wearers are guilty) or a subscription to the white-supremacist journal American Renaissance, records of a person’s political contributions are freely available online.

To be clear, I am not making the more general claim that all Republicans or supporters of Trump are racists. I’ll leave these topics to others. And I’ll even let the donors to Trump’s 2016 campaign off the hook, allowing that their actions could be attributed to ignorance or a visceral dislike for the Democratic candidate. My focus is squarely on donors supporting Trump’s re-election.

Let’s put this in the proper context: Every manager, consultant, and allocator will publicly state that they “stand against racism of any kind” (AQR), are “committed to racial equality” (BlackRock), and are “deeply disturbed by the awful acts of racial injustice our country has recently experienced” (Blackstone). This intolerance is confirmed in every employee handbook and value statement. Most recently, it  was exemplified in Franklin Templeton’s termination of Amy Cooper, its white former head of insurance solutions, after her well-reported encounter with a black man, Christian Cooper.


Racism certainly does not contribute to the common good. Quite the opposite: It destroys the common good by systematically disadvantaging members of an identified group.

It’s time allocators made managers pay the short-term cost for their support of a racist president. You can certainly ask them to explain their donations. After all, your fees pay for them.

Postscript: Recently, a group of investors banded together and asked specific companies to terminate business and public relations with the Washington, D.C., franchise of the National Football League if it does not stop using the name “Redskins.” Last week they succeeded.

If investors can act against the use of racist terms, then they should hold their managers to account for supporting a racist.