On January 6, 2017, JANA Partners, a New York–based activist hedge fund, and the California State Teachers’ Retirement System (CalSTRS) sent a letter to Apple’s board of directors that may change the future of activist investing. Citing a substantial body of expert research, the letter stated, “We believe there is a clear need for Apple to offer parents more choices and tools to help them ensure that young consumers are using your products in an optimal manner.” Overuse of iPhones by children and teenagers, the letter pointed out, has been linked to lack of attention in the classroom, difficulty in empathizing with others, depression, sleep deprivation, and a higher risk of suicide.
Why an Activist Hedge Fund Cares Whether Apple’s Devices Are Bad for Kids
On January 6, 2017, JANA Partners, a New York–based activist hedge fund, and the California State Teachers’ Retirement System (CalSTRS) sent a letter to Apple’s board of directors that may change the future of activist investing, pushing it to put in place better consumer protections. Jana and CalSTRS together own $2 billion in Apple stock, so it’s no surprise that the letter received worldwide attention after it was publicized by the Wall Street Journal. What was surprising, however, was the unlikely partnership between JANA and CalSTRS. Why would a progressive institutional investor be interested in partnering with an activist hedge fund? The truth is that the worlds of activism and impact investing are converging much more swiftly than most people realize — and this union holds enormous promise for those who wish to see the creation of capital markets that support sustainable economic development. I sit on an advisory board for JANA, and it’s difficult to describe how excited I feel about the prospect of an activist hedge fund pushing an ESG agenda in such a public way. It’s like Nixon going to China. If the hard-nosed activist hedge fund community thinks ESG is important, what more is there to say to convert skeptical managers, investors, and policy makers?