Ashby Monk has been working on institutional investor research for 10 years at Stanford University. He was just recently given the opportunity to build a dedicated research function based on his work.
Stanford announced it is launching a Research Initiative on Long-Term Investing, headed by Monk, a Stanford researcher and investor with over a decade of experience studying pensions, endowments, and other institutional investors. The initiative launched in November 2021, but the website officially went live just last week.
“The reason that’s exciting is because it allows us to take this research on long-term investors and kind of make it the focal point,” said Monk, “rather than having it be just a secondary focus of a broader research agenda.”
According to the website, the initiative has four primary focus areas: technology, portfolio resilience, institutional innovation, and new theoretical models.
“When we think about long-term investing, these intergenerational issues become much more material,” said Monk. “Diversity and inclusion, supply chain management, good governance, and climate risks all end up having to be integrated into an investment logic. And that logic is what we’re interested in developing.”
Some of titles of current working papers include “Resilience as an Analytical Filter for ESG Data” and “An Economic Case for Transparency in Private Equity: Data Science, Interest Alignment and Organic Finance.” Environmental, Social and Governance investing is a key focus for the initiative.
“Most recently, we’ve been doing a lot of work on resilience, which is a way of helping institute long-term institutional investors like pension super funds properly integrate ESG and risk management into a single coherent capability,” said Monk.
The research initiative is also focusing on innovation, which it believes is often underdeveloped in most long-term institutional investing organizations.
“Most LTIs were designed to prevent innovation, as governance models were prudent, fiduciary bound and highly conservative,” states the research initiative website.
Monk hopes that ultimately, this research helps institutional investors develop tools that will improve their returns.
“We lovingly think of these institutional investors as the basis of the capitalist system,” said Monk. “Their capital funds all of the projects and companies that go on to drive so much of the economic activity in the world. They’re arguably most important organizations on earth.”