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  • Irrational Capital

Year-end Update from Irrational Capital

As we approach the end of the year, we are delighted to share some important developments taking place at Irrational Capital, including:

Continued validation of the Human Capital Factor (HCF) by JP Morgan which released its third research report on the strength and versatility of our HCF strategies in the last 18 months;

  • The launch of a second HCF-driven ETF (Ticker: HAPI) by Harbor Capital (which crossed $200M in AUM within its first two weeks); and

  • The expansion of our team with the addition of Hannah Grove to our Board of Advisors.

We’re incredibly excited about this momentum as we gear up for an even more impactful 2023 which will include new ways to partner with us (as briefly outlined below).

Additional Human Capital Factor Validation by J.P. Morgan

JP Morgan’s Quantitative Research Team previously published ‘Creating an Innovation Culture Score Using Human Capital Factor Data’ (January 2022) and ‘Introducing the Human Capital Factor’ (March 2021), each of which is a deep dive into our proprietary HCF data and research. These pieces represented two profound validations of our work by the financial research powerhouse within a year.

We are honored that the same JP Morgan research team has now published a third report on our work: ‘Measuring an Intangible Asset: The Human Capital Factor.’ Key highlights from the report include:

"The Human Capital Factor exhibits noteworthy long-term outperformance... All-in-all Irrational Capital demonstrated that their approach to quantifying human capital using employee feedback-based data can deliver significant outperformance for a wide array of applications. The takeaway from this section is that human capital is not being correctly priced by the market, and hence provides the opportunity for outperformance for strategies which incorporated human capital as a factor.”

This latest research note resulted from a DeepFin Workshop hosted by JP Morgan in October, during which the Irrational Capital team demonstrated the link between company culture and future equity performance and how it can be made investable via the HCF. The workshop (and corresponding report) demonstrates the incredible strength and robustness of the Human Capital Factor and how it can be deployed in a wide range of applications to generate alpha.

Launch of HAPI ETF / Crossing $200M in AUM in First Two Weeks

On October 13, Harbor Capital launched its Harbor Corporate Culture ETF (Ticker: HAPI), a second ETF based on the HCF. HAPI is an S&P replacement strategy built on the Human Capital Factor and designed for socially conscious investors who are equally interested in alpha.

And we are not the only ones who believe that HAPI offers unique value. VettaFi (formerly ETF DB) named HAPY the ETF of the Week during its first week.

We are proud to share, HAPI secured more than $200M AUM after its first two weeks!

Hannah Grove (former CMO of State Street) Joins Our Growing Team

Our team is stronger than ever as Hannah Grove, former CMO at State Street, joined our Advisory Board and has taken an active role in our marketing and awareness initiatives. Throughout her career, Hannah has been passionate about culture, diversity and inclusion in a way that resonates deeply with the Irrational Capital mission.

Among other notable accomplishments, she was named to American Banker’s list of “Top 25 Most Powerful Women in Banking” in 2017, 2018, 2019 and 2020; to OUTstanding’s list of top LGBTQ allies for five years; and to the HERoes Champions of Women in Business lists of female role models working to increase gender diversity. Hannah is also an advisory board member for reboot, which seeks to advance more ethnic minority representation within UK financial services.

Under her expert guidance, we have established a presence at industry-leading events such as SALT and in publications such as Pension & Investments and Fortune.

We are grateful for her advocacy and feel lucky to be on this journey with her.

Upcoming Event – P&I Future of Work Conference

If you are planning to attend P&I’s Future of Work Conference in New York City on December 13, please note that Hannah Grove will be a featured panelist and Dan Ariely will be a keynote speaker. If you will be at the conference or in the NYC area around the same time, please let us know. We’d love to connect.

Additional Ways to Collaborate

2022 has been a hugely impactful year for Irrational Capital. Even as we celebrate the firm’s current accomplishments, we think the potential impact of the Human Capital Factor on companies and their employees can be even more powerful. To that end, we have developed two important new offerings:

  • the first enables investment managers to secure a bespoke HCF strategy and/or apply a HCF screen to an existing portfolio, and

  • the second enables companies to obtain a personalized and detailed Human Capital Rating report.

If you’re interested in engaging with these new or our existing products, please contact us to learn more.

We are indebted to you for your continued support. Together, we believe we can create a rising tide for employers, employees, and investors even amid complex and somewhat unsteady seas.

With our sincere appreciation,

David, Dan, and the IC Team

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