Republican presidential hopeful Vivek Ramaswamy built his White House bid around urging companies to stay 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, according to private email correspondence 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, both 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 is no longer on its board while he runs for president.
When he launched his company last year, Ramaswamy told CNBC that businesses should “focus on 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 in the boardrooms of corporate America that most of their own clients disagree with.”
Ramaswamy and his firm have since jumped into the political clash over ESG investing platforms, according to 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 have defended the fossil fuel industry and criticized environmentally conscious investment standards.
Ramaswamy on Thursday defended the firm’s engagement with GOP officials, saying bigger firms BlackRock, Vanguard and State Street have conducted similar practices with state officials across the country.
“The biggest asset allocators into the asset management systems are state pension funds and BlackRock, State Street, Vanguard, Invesco and others, are regularly engaged,” Ramaswamy told CNBC. “It’s just a hard fact that these institutions have for decades been educating, discussing with states and pension fund systems, the merits of ESG based investment framework. Strive is bringing an alternative perspective to bear across the market.”
Since he began his campaign, Ramaswamy has deferred questions about Strive’s business strategy 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 about the emails showing how the firm has become a leading organizer against ESG investing, Cole said: “I think Strive is the leading voice in America pushing in favor of shareholder capitalism.”
Strive has become 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 company’s board “reflects an overrepresentation of directors whose principal focus appears to be on Exxon’s climate change strategy.”
Ramaswamy later secured a meeting 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 would 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 same time focused its investment strategy on fossil fuels. Strive launched an ETF in 2022 called Strive U.S. Energy, which is listed on the New 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 new mandate.”
“What I call the post ESG mandate to the U.S. energy sector to drill for more oil,” he said at the time. “To frack for more natural gas. To do whatever allows them to be most successful over the long run without regard to political, social, cultural or environmental agendas.”
The firm’s overall assets under management total over $520 million, according to a regulatory filing signed in February and submitted by Strive to the Securities and Exchange Commission. The form was signed a week after Ramaswamy announced he was running for president, and shows that at that time his ownership stake in Strive was at least 50%. Ramaswamy did not dispute in the CNBC interview that he still owns at least 50% of the company.
Cole confirmed that the ownership structure listed on the filing has not changed 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 organize ESG forum
Ramaswamy has cast himself for years as a leading culture warrior against major corporations and extended his fight to the campaign trail. He co-founded the anti-ESG firm in 2022, a year 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 within the GOP.
The opposition to businesses expressing political views has helped to propel Ramaswamy to the top tier of the Republican primary, according to early polls. One recent Morning Consult 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 about the Trump administration are “the reason he is doing so well.”
The emails suggest that both 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 email labeled as the “Pro-Fiduciary Investors Taskforce.”
The more than 30 people invited to participate included at least half a dozen Republican state financial officers who have either vehemently opposed ESG investment standards, or in some cases, have used their power to directly take on Wall Street firms that follow the practice, the email shows. Ramaswamy was not on the invite list.
Matthew Kopko, a senior vice president at Strive, said in one of the obtained emails that the “kick-off call” would focus, in part, on a Biden administration rule that allows employers to select ESG funds for their company 401(k) plans. In March, days before the meeting took place, President Joe Biden vetoed a bill that would have rolled back the Labor Department standard.
Cole confirmed to CNBC that the veto came up on the call.
“I think the vast majority of people [at the meeting] thought the bill should not have been vetoed,” he said. Cole added that “it was pretty interesting I think from our perspective that the first veto of Biden’s presidency was a bipartisan bill that was focused on maximizing value, or forcing asset managers to focus on maximizing value.”
An emailed invite to the Zoom call also shows that Strive executives were planning to organize a central forum to discuss ESG-related issues.
“As discussed with many of you across the nation, there is strong interest among 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 another 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 take part in the call. He announced in 2022 that the state will no longer use a BlackRock investment fund as part of its banking transactions. Representatives for Moore and Patronis said the two did not participate in the call.
Marlo Oaks, the Utah state treasurer who labeled ESG part of “Satan’s plan” and moved about $100 million in state money previously managed by BlackRock to different asset managers, is also listed as invited to the call. A representative for Oaks did not respond 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 take part in the call. Ramaswamy was a keynote speaker at one of the foundation’s meetings last year and the state chief financial officers invited to take part on the Strive call are publicly listed SFOF members. A representative for Kreifels said the nonprofit CEO did not participate in the call.
Kopko sent a follow-up email in May for what he described as the “next task force call.” The email shows that the next event was set to take place May 3. While there’s no document showing who was invited to that Zoom gathering, the itinerary for the call notes that ESG critic and Yale law school professor Jed Rubenfeld was expected to give a “presentation on state pension fiduciary duties.”
Cole said Rubenfeld’s presentation on that call was about “best practices for pensions.” He explained there were about 30 people on the call and most of the people at the meeting were “pension-related employees,” along with some state attorneys general.
Cole said he didn’t know all of the state AGs who took part in the call and which political party they were affiliated with. But he also said that “typically Republican AGs have been more interested in trying to pushback against asset managers pursuing non financial interests but 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, according to the emails.
His firm’s leaders privately turned to anti-ESG Republican state officials in both Texas and West Virginia to help gain access to government officials to discuss Strive’s business ventures, either through in-person or Zoom meetings, according to emails from September through March.
Cole said they’ve met with leaders from more than 20 states and have also engaged with large wealth managers about their company. “To me these are just two meetings that we have on our calendar every day,” 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 one of his top donors, oil and gas developer Ben “Bud” Brigham. Frericks in the email requested a “warm introduction” to a state-based contact for an “emerging managers fund for new firms like Strive.”
“At lunch with Bud Brigham, you mentioned that TX has an emerging managers fund for new firms like Strive. Are you able 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 email.
Hegar had argued in letters to money managers in 2022 that firms such as BlackRock, HSBC and UBS are boycotting the energy industry, saying in a statement 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,” according to 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 discuss Strive’s proxy voting services, according to the emails.
Representatives for Hegar and Reissig did not respond to requests for comment.
Federal Election Commission records show that Brigham, the same oil and gas executive who had lunch with Frericks in August, donated $6,600 in March to Ramaswamy’s campaign for president. That amount represents the most an individual donor can give directly to a campaign in the 2024 election cycle.