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Wondering if these funds may be obligated to work in the interest of their investors vs just maximize dollar value. For example, should a factory worker retire
by psadri 9y ago
Wondering if these funds may be obligated to work in the interest of their investors vs just maximize dollar value. For example, should a factory worker retirement fund invest in robotic companies that automate workers out of a job? I suppose the argument is that if they don’t someone else will.
- chatmasta 9y agoWhat you’re referring to is activist investing, or what is more descriptively known in most cases as activist divesting. Activist groups put pressure on funds to invest in, or divest from, certain assets. For example, my college’s endowment was invested to varying degrees in the oil/energy industries. A bunch of forestry school grad students organized a “divestment campaign” to pressure the investment office to divest from anti-environment assets. I’m not sure how effective they were in the end, but they sure made a lot of noise. So yes, endowments/pensions/sovereign wealth funds are certainly obligated to listen to their “constituents” if you will, but only by societal contract. A big enough PR storm should be sufficient to drive investment or divestment, if enough people are emotional and aggressive in marketing their argument.