Manager backed by Thiel, Ackman to launch ETFs emphasizing excellence over politics

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.

"To date, you could say it's no one's fault because there maybe hasn't been an alternative choice" he said. "But once we bring that choice to the table, being agnostic on that issue is no longer an option for a fiduciary."

A spokeswoman for Vanguard Group said it stewards the assets of more than 30 million individual investors who it knows hold a broad range of personal views and priorities.

"One thing they have in common is entrusting Vanguard with their savings for long-term goals like retirement," the spokeswoman said. "We are grounded in our duty to act in their best interests."

Benjamin Colton, global head of asset stewardship – voting and engagement at State Street Global Advisors, said in a statement that while it has seen a shift in recent years regarding how financial institutions have voted, SSGA has maintained a "clear and consistent" approach to its voting, especially on shareholder proposals.

"We have published several frameworks on how we evaluate the proposals on social and environmental matters and believe this transparency builds credibility and is in the best interest of our clients," Mr. Colton's statement said. "Our stewardship efforts continue to be focused on creating value and fulfilling our fiduciary duty."

A spokesman for BlackRock declined to comment.

BlackRock had $9.6 trillion in assets under management as of March 31. Vanguard's AUM totaled $8.1 trillion as of March 31, while SSGA's AUM totaled about $4 trillion.