Man Group’s Post

Can human capital drive portfolio returns? And if it can, what's the value of firm culture, human motivation, innovation, and even neurodiversity? When I ask investors about human capital, I tend to get two responses. One focuses on human rights violations as a kind of risk analysis, especially along supply chains. The second lays at the firm level in, to some degree, a box-ticking exercise across issues like board gender diversity, the gender pay gap, and health and product safety. And look, these are all important issues. But my point is this: what seems to be largely missing at least on the buyside is rigorous research examining how firm culture, people, and purpose can actually affect asset prices. Which is why it's great to have Professor Dan Ariely from Duke University--3x New York Times best-selling author--on the podcast. As the creator of the first human capital factor used by institutional investors, Dan discusses what a human capital factor looks like; how incentives and the basic idea of “feeling valued “are fundamental drivers behind employee motivation; and why human capital can represent an overlooked source of alpha. We also talk about the efficacy of gender indices; the fallacies around equality and fairness; and why understanding neurodiversity in the workforce presents a big frontier in this area. It's a great episode that references research from Alex Edmans and Campbell Harvey. Podcast links at: Apple Podcast - https://apple.co/43bosmJ Spotify - https://spoti.fi/2Pp0AKa Man Group Institute - https://bit.ly/4cZvdvJ Soundcloud - https://bit.ly/3AYiFY9 As always, a transcript can be found at https://bit.ly/4cZvdvJ 💥 Special shoutout to Bowie Ko for helping to develop this episode and her outstanding work on human capital.