Not often will you see a hedge fund billionaire badmouth capitalism and take on the issue of income inequality. It just begs for calls of hypocrisy. So consider Paul Tudor Jones fearless. The hedge fund manager and philanthropist suggested that the current form of capitalism that’s being practiced is rather archaic – both from a social responsibility perspective and, in a way, on a macroeconomic level.
Speaking to CNBC, Jones said that economist Milton Friedman’s oft-cited pillar of capitalism – that the social responsibility of a company is to improve its profits – is outdated. "Capitalism may need modernizing," he said, pointing to the ever-widening wage gap and recent tax law changes. But Jones wasn’t talking entirely from an altruistic vantage point. The head of Tudor Investment Corp. and the Robin Hood Foundation sees corporate social responsibility, including fair wage practices, as a potential predictor of a good investment as well.
Jones’ mini media tour highlighted the launch of a socially-conscious ETF from Goldman Sachs that’s based on a series of metrics that he and others developed to help identify companies that follow more of a moral compass, starting with employee pay. His research says these corporations represent better investment opportunities than those that are seemingly only concerned with profitability.
Jones’ comments come a year after fellow hedge fund titan Ray Dalio suggested that income inequality is a sign of societal and economic weakness that can lead to populism and, eventually, political extremism. Both investment gurus cited near-century old historical examples advocating for the mending of the wage gap for reasons beyond simple fairness and equality. The problem may be broader than that, both politically and economically.
Elsewhere, BlackRock is embedding itself further into the software industry with a new iteration of its Aladdin risk management platform that can double as a lead generation tool of sorts. Aladdin for Wealth, designed to help brokers and investment managers analyze risk in client accounts, should provide BlackRock with the opportunity to sell more of its own funds, according to Bloomberg.
Detractors say that the widespread adoption of Aladdin, already utilized by many large asset management firms, may lead to a form of groupthink that can result in systematic risk. If BlackRock suddenly falters, so could all the funds that rely on its once-proprietary software, goes the theory.
Credit Suisse has been actively cutting senior M&A bankers in Europe with a primary focus on its London office. (Bloomberg)
Robert Steininger, RBC’s head of healthcare investment banking team in the U.S., has left the firm. The news comes just a few days after the firing of his boss, U.S. investment banking chief Blair Fleming, who failed to disclose an improper relationship with an employee. Steininger left before Fleming was let go, however. (Bloomberg)
Here’s Lloyd Blankfein’s pitch to tech students on why they should join Goldman Sachs. Interestingly, he backed off his proclamation that Goldman is a tech company. (Yahoo Finance)
UBS is considering adding headcount within its family office operations in Asia as it concentrates more resources on high-net worth clients. (Bloomberg)
Goldman Sachs just invested millions in an AI startup that helps bankers and lawyers analyze complex contracts. (Business Insider)
Nomura is investing in its global markets business with a focus on equities, foreign exchange and structured lending. (Business Times)
Tech researchers have developed machine-learning software to help predict the winner of the World Cup. Germany and Spain are your favorites. (Tech Review)
Here’s a list of the medium income in every U.S. state, adjusted for cost of living. (Money)
Raccoon scales UBS tower in Minnesota. (Guardian)
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