Paul Tudor Jones On 'Just' Companies, Trump's Win And Why It's Time For A Rethink Of The U.S. Economy

Steve Schaefer (Forbes) | Dec. 5, 2016

Billionaire investor Paul Tudor Jones II has a long history in the philanthropic realm. He’s been involved in environmental causes and is the founder of the Robin Hood Foundation, which combats poverty in New York. He’s now tackling the corporate realm with JUST Capital, the non-profit beyond the research and ranking that resulted in the Just 100, Forbes’ new list of America’s best corporate citizens. In mid-November we spoke about Donald Trump’s stunning electoral victory, what it means for the market, and why Tudor Jones thinks getting companies to do good for more than just investors could just be the next big thing in finance.

What drove the creation of Just Capital and the idea that it’s worthwhile to rank companies on more than just delivering profits and shareholder returns?

Really I think our first initial idea was this would be a great investment idea to screen companies for their “justness.” We found out that those companies over the past decade had significantly outperformed the S&P. So that was really exciting, because it made the whole ETF concept promising.

We began to think about trying to get the public to define “what is justice?” Then we started to understand that if we really did have a credible index, if we really did have a way of giving the American public a voice, that we could have a much greater impact.

In a world where shareholders have become too dominant, we are now giving the other major constituents in any kind of corporate equation a voice. That voice, while it didn't have direct voting power in the c-suite it certainly had massive indirect power because you depend upon your consumers, you depend upon your employees and you depend upon investors at large, and you depend upon communities.

Then I think the eureka moment kinda came when we started thinking about what kind of impact we could have. Having been involved in a couple different not-for-profits over 30 years, the holy grail was always to get the government to match us or partner with us. But total public budgets are close to $4 trillion whereas the total private sector is close to $16 trillion. I think that's when the eureka moment came, that we could truly, materially, significantly impact in a positive way, with such greater scale, in a movement towards justice, by using the free market to modify behaviors in the C-suite.

That was when I think all of us got really, really excited, when we realized this thing was a hell of a lot more powerful than just creating a great ETF.