Republican presidential candidate businessman Vivek Ramaswamy speaks to guests on the Iowa Faith & Freedom Coalition Spring Kick-Off on April 22, 2023 in Clive, Iowa.
Scott Olson | Getty Images
Republican presidential hopeful Vivek Ramaswamy built his White House bid around urging firms to remain out of politics.
What he doesn’t tell voters is the asset management firm he co-founded has engaged more with Republican Party officials behind the scenes than was previously known, in line with private piece of email reviewed by CNBC.
The emails show how the firm, Strive Asset Management, became a lead organizer and voice against environmental, social and governance, or ESG, investing, each before and since Ramaswamy entered the presidential race in February.
Ramaswamy told CNBC in an interview Thursday that he stepped away from his role as executive chairman of the firm and isn’t any longer on its board while he runs for president.
When he launched his company last yr, Ramaswamy told CNBC that companies should “deal with excellence over politics.” He slammed ESG-style investing by BlackRock, State Street and Vanguard, and accused the firms of using “their clients’ capital to advocate for viewpoints within the boardrooms of corporate America that the majority of their very own clients disagree with.”
Ramaswamy and his firm have since jumped into the political clash over ESG investing platforms, in line with the emails, which were obtained by watchdog Documented and provided to CNBC. The messages show Ramaswamy’s firm actively engaged with GOP state leaders who’ve defended the fossil fuel industry and criticized environmentally conscious investment standards.
Ramaswamy on Thursday defended the firm’s engagement with GOP officials, saying greater firms BlackRock, Vanguard and State Street have conducted similar practices with state officials across the country.
“The most important asset allocators into the asset management systems are state pension funds and BlackRock, State Street, Vanguard, Invesco and others, are recurrently engaged,” Ramaswamy told CNBC. “It’s just a tough incontrovertible fact that these institutions have for many years been educating, discussing with states and pension fund systems, the merits of ESG based investment framework. Strive is bringing an alternate perspective to bear across the market.”
Since he began his campaign, Ramaswamy has deferred questions on Strive’s business technique to the firm.
Strive CEO Matt Cole echoed Ramaswamy’s remarks in an interview with CNBC.
“We’re just copying the playbook of BlackRock, State Street and Vanguard,” Cole said Thursday. When asked in regards to the emails showing how the firm has develop into a number one organizer against ESG investing, Cole said: “I believe Strive is the leading voice in America pushing in favor of shareholder capitalism.”
Strive has develop into certainly one of the more vocal opponents of ESG investing and has gained enough notoriety to challenge the likes of fossil fuel giant ExxonMobil. Ramaswamy, as Strive’s executive chairman, sent a letter to Exxon in November saying the corporate’s board “reflects an overrepresentation of directors whose principal focus appears to be on Exxon’s climate change strategy.”
Ramaswamy later secured a gathering with Exxon CEO Darren Woods. Strive said in a December press release that the oil and gas executive “pushed back on certain points in Strive’s letter but committed to exploring suitable directors for Exxon’s board with relevant industry expertise.” A month after the meeting, Exxon announced it might add Lawrence Kellner, a former CEO of Continental Airlines, and John Harris II, a former CEO of Raytheon International, to its board.
Ramaswamy’s firm at the identical time focused its investment strategy on fossil fuels. Strive launched an ETF in 2022 called Strive U.S. Energy, which is listed on the Latest York Stock Exchange as DRLL. The fund’s fact sheet lists Exxon, Chevron and ConocoPhillips as its top three holdings. It has net assets of over $300 million.
Ramaswamy told CNBC on the day the ETF launched that Strive “is delivering a recent mandate.”
“What I call the post ESG mandate to the U.S. energy sector to drill for more oil,” he said on the time. “To frack for more natural gas. To do whatever allows them to be most successful over the long term without regard to political, social, cultural or environmental agendas.”
The firm’s overall assets under management total over $520 million, in line with a regulatory filing signed in February and submitted by Strive to the Securities and Exchange Commission. The shape was signed every week after Ramaswamy announced he was running for president, and shows that at the moment his ownership stake in Strive was a minimum of 50%. Ramaswamy didn’t dispute within the CNBC interview that he still owns a minimum of 50% of the corporate.
Cole confirmed that the ownership structure listed on the filing has not modified since Ramaswamy announced his run for president. He added that Strive, as of Wednesday, had about $680 million in assets under management.
Strive moves to arrange ESG forum
Ramaswamy has forged himself for years as a number one culture warrior against major corporations and prolonged his fight to the campaign trail. He co-founded the anti-ESG firm in 2022, a yr after he published a book called “Woke, Inc.: Inside Corporate America’s Social Justice Scam,” which takes on the concept of stakeholder capitalism.
His declared and potential rivals, including former President Donald Trump and Florida Gov. Ron DeSantis, have often attacked ESG investing standards and corporations that support social causes — an increasingly common refrain inside the GOP.
The opposition to businesses expressing political beliefs has helped to propel Ramaswamy to the highest tier of the Republican primary, in line with early polls. One recent Morning Seek the advice of survey found him, in a hypothetical GOP primary field, tied with former Vice President Mike Pence for third place with 5% of support. He trailed only Trump at 60% and DeSantis at 19%.
Trump has raved about Ramaswamy, saying his positive comments in regards to the Trump administration are “the explanation he’s doing so well.”
The emails suggest that each before and after Ramaswamy explicitly jumped into politics, his firm had entered the fray by establishing ties to anti-ESG Republican officials.
In March, one month after Ramaswamy announced his run for president, Strive organized a call featuring what the e-mail labeled because the “Pro-Fiduciary Investors Taskforce.”
The greater than 30 people invited to participate included a minimum of half a dozen Republican state financial officers who’ve either vehemently opposed ESG investment standards, or in some cases, have used their power to directly tackle Wall Street firms that follow the practice, the e-mail shows. Ramaswamy was not on the invite list.
Matthew Kopko, a senior vice chairman at Strive, said in certainly one of the obtained emails that the “kick-off call” would focus, partly, on a Biden administration rule that enables employers to pick ESG funds for his or her company 401(k) plans. In March, days before the meeting took place, President Joe Biden vetoed a bill that may have rolled back the Labor Department standard.
Cole confirmed to CNBC that the veto got here up on the decision.
“I believe the overwhelming majority of individuals [at the meeting] thought the bill mustn’t have been vetoed,” he said. Cole added that “it was pretty interesting I believe from our perspective that the primary veto of Biden’s presidency was a bipartisan bill that was focused on maximizing value, or forcing asset managers to deal with maximizing value.”
An emailed invite to the Zoom call also shows that Strive executives were planning to arrange a central forum to debate ESG-related issues.
“As discussed with lots of you across the nation, there is powerful interest amongst state financial leaders to have a forum to share and learn information related to emerging developments in ESG, corporate governance, proxy voting, stewardship and other fiduciary matters,” Kopko said in one other email to those invited.
The officials invited included Jimmy Patronis, Florida’s GOP chief financial officer, who in December said the state treasury would pull out $2 billion in assets previously managed by BlackRock. West Virginia state Treasurer Riley Moore was also invited to participate in the decision. He announced in 2022 that the state will not use a BlackRock investment fund as a part of its banking transactions. Representatives for Moore and Patronis said the 2 didn’t take part in the decision.
Marlo Oaks, the Utah state treasurer who labeled ESG a part of “Devil’s plan” and moved about $100 million in state money previously managed by BlackRock to different asset managers, can be listed as invited to the decision. A representative for Oaks didn’t reply to a request for comment.
Derek Kreifels, the CEO of the conservative-leaning State Financial Officers Foundation, which has organized conferences bashing ESG investing, was also invited to participate in the decision. Ramaswamy was a keynote speaker at certainly one of the muse’s meetings last yr and the state chief financial officers invited to participate on the Strive call are publicly listed SFOF members. A representative for Kreifels said the nonprofit CEO didn’t take part in the decision.
Kopko sent a follow-up email in May for what he described because the “next task force call.” The e-mail shows that the following event was set to happen May 3. While there isn’t any document showing who was invited to that Zoom gathering, the itinerary for the decision notes that ESG critic and Yale law school professor Jed Rubenfeld was expected to provide a “presentation on state pension fiduciary duties.”
Cole said Rubenfeld’s presentation on that decision was about “best practices for pensions.” He explained there have been about 30 people on the decision and most people on the meeting were “pension-related employees,” together with some state attorneys general.
Cole said he didn’t know the entire state AGs who took part in the decision and which political party they were affiliated with. But he also said that “typically Republican AGs have been more thinking about attempting to pushback against asset managers pursuing non financial interests however the invite wasn’t to any particular political party.”
Getting access
Ramaswamy’s firm gained more access to anti-ESG Republican politicians before he launched a presidential bid than was previously known, in line with the emails.
His firm’s leaders privately turned to anti-ESG Republican state officials in each Texas and West Virginia to assist gain access to government officials to debate Strive’s business ventures, either through in-person or Zoom meetings, in line with emails from September through March.
Cole said they’ve met with leaders from greater than 20 states and have also engaged with large wealth managers about their company. “To me these are only two meetings that we’ve on our calendar daily,” he said.
Strive President Anson Frericks, in a September email to Texas Comptroller Glenn Hegar, discussed a lunch he had in August with Hegar and certainly one of his top donors, oil and gas developer Ben “Bud” Brigham. Frericks in the e-mail requested a “warm introduction” to a state-based contact for an “emerging managers fund for brand new firms like Strive.”
“At lunch with Bud Brigham, you mentioned that TX has an emerging managers fund for brand new firms like Strive. Are you in a position to provide us with a contact for that fund (I cc’d our Head of Institutional Investing, Rob Melton)? Or make a warm introduction?” Frericks asked Hegar in the e-mail.
Hegar had argued in letters to money managers in 2022 that firms akin to BlackRock, HSBC and UBS are boycotting the energy industry, saying in an announcement that he believes “environmental crusaders” have created a “false narrative” that the economy can transition away from fossil fuels.
Hours after Frericks sent his September email, Hegar replied in an email that he obliged the request for an introduction and forwarded Frericks’ email to Mike Reissig, the CEO of the Texas Treasury Safekeeping Trust Company. That entity was created by the Texas Legislature “as a special purpose entity to efficiently and economically manage, invest and safeguard funds for its clients: the state and various subdivisions,” in line with its website.
Hegar is the chair of the Texas Treasury Safekeeping Trust Company.
That introduction led to a March meeting being scheduled in Austin between Reissig, Frericks and Kopko to debate Strive’s proxy voting services, in line with the emails.
Representatives for Hegar and Reissig didn’t reply to requests for comment.
Federal Election Commission records show that Brigham, the identical oil and gas executive who had lunch with Frericks in August, donated $6,600 in March to Ramaswamy’s campaign for president. That quantity represents probably the most a person donor can provide on to a campaign within the 2024 election cycle.