The Anti-ESG Crusader Who Wants to Pick a Fight With Blackrock

It was smiles all around as the familiar Wall Street ritual—the ringing of the closing bell—played out again at the New York Stock Exchange on Aug. 10. But this was no ordinary photo op.

As the bell clanged and cheers went up, the figure in the center, Vivek Ramaswamy, was visibly delighted. A wealthy biotech entrepreneur turned anti-“woke” evangelist, he’s at the vanguard of a new conservative movement—one that’s bringing America’s political divisions to the money-loving heart of Wall Street.

Its target: BlackRock Inc., the world’s largest asset management company. Forget #MeToo, Black Lives Matter, and rainbow flags. To Ramaswamy and his pack, the business of corporate America is business. Period.

He and the others crowding onto the marble balcony had come to deliver a warning to the financial markets: American capitalism is being threatened by corporations embracing social causes. Ramaswamy and his supporters want to force chief executive officers to focus only on profits—and score a little for themselves, too.

Corporate America, like so much else, is being cleaved into red and blue. And Wall Street is getting tangled in the messy debate. ESG— investing with environmental, social, and governance principles—has become the right’s new bogeyman. Prominent Republicans are joining Ramaswamy in pushing back at what they call a liberal agenda, and they’re starting to influence who gets to handle huge sums of taxpayer money and where all that money is invested. Enter Ramaswamy, 37, author of the 2021 book Woke, Inc.: Inside Corporate America’s Social Justice Scam. Sensing opportunity, he’s started his own investment company with backing from billionaire investors Peter Thiel and Bill Ackman.

Ramaswamy’s little company, Strive Asset Management LLC, has crazy big ambitions. At the Big Board, he was listing a modest energy exchange-traded fund with a not-so-modest ticker: DRLL. Joining him was a Trump-world sampler of conservative think tankers, Republican politicians, and a few Wall Street types such as Howard Lutnick, CEO of Cantor Fitzgerald LP. Lutnick told attendees that Strive can speak for the “silent majority” of Americans who want business to mind its business. Lutnick and Thiel didn’t respond to requests for comment, and Ackman declined to comment.

Ramaswamy isn’t alone in thinking it’s time to push back at the ESG movement. Deep-red Texas wants to yank state money away from financial firms that are seen as hostile to fossil fuel companies. West Virginia has blacklisted some Wall Street businesses for the same reason. In Arizona, Republican Senate candidate Blake Masters has characterized ESG scores as an existential threat to America. And on Aug. 23, Republican Ron DeSantis, running for reelection as Florida’s governor and widely seen as a contender for his party’s 2024 presidential nomination, banned the state’s pension fund managers from considering “social, political, or ideological interests” when making investment decisions.

All he and the anti-ESG state officials are doing is taking politics out of the C-suite, Ramaswamy says. That’s debatable: One study in July by University of Pennsylvania and Federal Reserve economists showed that Texas entities alone will pay as much as $532 million in extra interest on $32 billion in borrowing this year under its 2021 law. Bryan McGannon, director of policy and programs at US SIF, a trade group that promotes sustainable investment, says Florida’s moves are “clearly tied to politics, because it’s certainly not in the best interest of pension fund beneficiaries” to say that climate change isn’t a financial issue. In a state whose 8,000 miles of coastline make it highly vulnerable to flooding, “that just doesn’t make sense,” he says.

It sounds laughable, but Ramaswamy insists Strive will one day take on BlackRock, a leading proponent of sustainable investing. New York-based BlackRock manages $8.5 trillion. Strive, located near Columbus, Ohio, manages one fund, DRLL, worth about $300 million. The firm has filed to start several more funds. BlackRock declined to comment.

BlackRock CEO Larry Fink for years has pushed corporate bosses to look beyond short-term profits and embrace stakeholder capitalism, in which companies consider, alongside shareholders, the interests of employees, the environment, customers, local communities, and others with a stake in the survival of a corporation. Its proponents say profits will improve in the long run.

At first, Fink attracted a lot of criticism. Today, stakeholder capitalism and ESG investing are mainstream. If anything, left-leaning groups say BlackRock isn’t moving fast or far enough. But to Ramaswamy and his allies on the right, BlackRock is unfairly using its leverage as the largest shareholder in many companies to advance social causes that should be decided at the ballot box. In January, Fink used his latest annual letter to defend his position: “Stakeholder capitalism is not about politics,” he wrote. “It is not a social or ideological agenda. It is not ‘woke.’ It is capitalism.”

Ramaswamy, too, says his message is nonpartisan and expresses disappointment that it “has been too limited to the American right. It’s not for lack of effort.” Yet his pitch sounds a lot like a political manifesto. In language reminiscent of a Donald Trump rally or Fox pundit Tucker Carlson (Ramaswamy has appeared on Carlson’s show), he says Strive will speak for the “forgotten,” the “disempowered,” the “abused”—for the 100 million-plus ordinary investors whose voices are being drowned out by elitist big money.

A Zelig of the conference circuit, he’s cultivating the red-state governors, treasurers, and pension officials who decide where the public’s money flows. “Money doesn’t talk, it screams,” Ramaswamy says. “We allow people to speak in a way that they haven’t been able to speak before.” Lean and fast-talking, he throws off the frenetic energy of a campaigner on the trail—which, in a way, he is. Shirt sleeves rolled up, digging into Mexican takeout, he goes on about Vladimir Putin and the politics of victimhood and then name-checks Alexis de Tocqueville on American democracy during an interview at the NYSE.

He toyed with running for a US Senate seat in Ohio as a Republican at one point, but he wants to be clear: Strive isn’t some political operation masquerading as a business. It’s not what anyone might have expected. The son of emigrants from India, Ramaswamy grew up in Evendale, about 20 miles north of downtown Cincinnati. His CV reads classic overachiever: high school valedictorian, Harvard, Yale Law. After spending his 20s in the hedge fund game, he made a fortune in biotech and graced a Forbes cover in 2015, at age 30.

Not everyone who’s invested alongside him has done as well. His initial company plunged after an Alzheimer’s drug failed a clinical trial. A related business, Roivant Sciences Ltd., stumbled after going public. SoftBank Group Corp., a huge backer of startups, wrote down the value of its investment by about half, to $500 million, as of March 31. Ramaswamy’s stake is worth about $260 million.

Two events changed his course, he writes in his book. One was Black Lives Matter. As millions poured into the streets to protest racial injustice after the 2020 killing of George Floyd, Roivant employees pressed Ramaswamy to do more to address systemic racism and speak out the way other CEOs were. He didn’t want to, and some colleagues got upset. The second was the US Capitol riot, on Jan. 6, 2021, which he says horrified him. That time, he did go public, criticizing social media companies for shutting down the accounts of Trump and some of his supporters. Advisers to Roivant promptly distanced themselves.

Ramaswamy says people were expecting executives to take a public stand on some issues but not others. He wanted to speak his mind as a private individual, so he quit as CEO and wrote Woke, Inc., an almost 400-page indictment of “wokenomics.” Conservative media ate it up. (He says he sent a signed copy to Fink.) “Wokeism is far more dangerous than Marxism,” Ramaswamy said on Fox News last year.

He compared notes with a high school friend, Anson Frericks, on how Coca-Cola Co. was speaking out for voting rights in Georgia. Ramaswamy and Frericks considered starting a rival soft drinks business—a sort-of anti-Coke that would steer clear of politics. They concluded the odds were against them. Instead they went “upstream,” as they put it, to the companies that wield power by managing other people’s money. In a jab at BlackRock, they code-named their project Whitestone. They raised capital from Lutnick and venture capitalist Joe Lonsdale, who didn’t respond to requests for comment. The VC firm co-founded by Hillbilly Elegy author J.D. Vance, who’s running for a US Senate seat in Ohio with an endorsement from Trump, also sent money. Strive officially opened in May. Today it employs 30 people. BlackRock has 18,000.

Although Ramaswamy may border on a money management troll, he’s finding receptive audiences. In January he was in Missouri, signing copies of his book at a chapter of the conservative Federalist Society. In Louisiana weeks later, he collected an award at the conservative-aligned State Financial Officers Foundation. In June he spoke in Tennessee at a Heritage Foundation conference. A private steakhouse dinner followed, according to emails obtained by Documented, a watchdog group. On the invite list: a Strive executive (not Ramaswamy), the Republican Attorneys General Association, and state treasurers from Missouri, Nebraska, Utah, and West Virginia. Their spokespeople declined to comment or didn’t respond to requests for comment.

He spoke about ESG with trustees for Missouri’s retirement system in June. And in July, at a DeSantis news conference, the governor criticized stakeholder capitalism—and then introduced Ramaswamy’s firm. “Vivek and the governor both agree that ESG is an improper politicization of investment practices,” a spokesperson for DeSantis says.

In August, Ramaswamy attended an energy conference in Colorado where he showcased the types of proposals Strive would support, including one that would make hiring, promotions, and pay “exclusively based on job qualifications, without regard to race, gender, sexual orientation, or political views.” Also last month, he took the stage the day before Trump at the Conservative Political Action Conference, the gathering of the right wing in American politics. He delivered a talk on the “ABCs of ESG.” The tag on the CPAC website: “AWAKE NOT WOKE.”

Ramaswamy insists he’s not looking to divide Wall Street into red and blue, yet he’s not ruling out this is the way things might go. “It may be that as an asset manager, you can’t represent California and Texas at the same time.” —With Frances Schwartzkopff

Reporting from Bloomberg.