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• Case | HBS Case Collection | April 2019 (Revised July 2019)

  Aperture Investors

  Krishna G. Palepu, George Serafeim and David Lane

  Aperture Investors is a startup investment firm that seeks to disrupt the asset management industry through competitive differentiation by charging investors primarily when its portfolio managers outperform the marketplace. Headed by Wall Street veteran Peter Kraus and backed with substantial and patient seed capital, Aperture seeks to attract both star portfolio managers and assets from mutual funds and hedge funds. Kraus believes that his innovative business model addresses the current dysfunctional fee and incentive structures in the industry, which have led to long-term market underperformance, and that Aperture will address the reasons that are motivating investors to shift to cheaper, passively-managed index and exchange-traded funds.

  Keywords: Business Model; Talent and Talent Management; Investment; Investment Funds; Asset Management; Recruitment; Selection and Staffing; Marketing Channels; Emerging Markets; Partners and Partnerships; Motivation and Incentives; Financial Services Industry;

  Citation:

  Palepu, Krishna G., George Serafeim, and David Lane. "Aperture Investors." Harvard Business School Case 119-053, April 2019. (Revised July 2019.)  View Details

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• Article | Harvard Business Review | July–August 2019

  How to Scandal-Proof Your Company

  Paul M. Healy and George Serafeim

  Despite efforts to crack down on illegal activity, crimes like fraud, bribery, embezzlement, and money laundering are rampant in corporations. What steps can leaders take to fix this growing problem?

  Keywords: Organizations; Crime and Corruption; Organizational Culture; Leadership; Ethics;

  Citation:

  Healy, Paul M., and George Serafeim. "How to Scandal-Proof Your Company." Harvard Business Review 97, no. 4 (July–August 2019): 42–50.  View Details

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• Article | Management Science | July 2019

  Market Reaction to Mandatory Nonfinancial Disclosure

  Jody Grewal, Edward J. Riedl and George Serafeim

  We examine the equity market reaction to events associated with the passage of a directive in the European Union (EU) mandating increased nonfinancial disclosure. These disclosures relate to firms’ environmental, social, and governance (ESG) performance and would be applicable to firms listed on EU exchanges or with significant operations in the EU. We predict and find (i) an on average negative market reaction, (ii) a less negative market reaction for firms having higher pre-directive nonfinancial performance, and (iii) a less negative reaction for firms having higher pre-directive nonfinancial disclosure levels. Results are accentuated for firms having the most material ESG issues, as well as investors anticipating proprietary and political costs as a result of the mandated disclosures. Overall, the results are consistent with the equity market perceiving that this disclosure regulation of nonfinancial information would lead to net costs (benefits) for firms with weak (strong) nonfinancial performance and disclosure.

  Keywords: nonfinancial information; nonfinancial performance; ESG; ＂ESG (environmental, social, governance) performance; investor behavior; disclosure; disclosure regulation; regulation; sustainability; Corporate performance; Information; Corporate Disclosure; Governing Rules, Regulations, and Reforms; Performance; Environmental Sustainability; Corporate Governance; Outcome or Result;

  Citation:

  Grewal, Jody, Edward J. Riedl, and George Serafeim. "Market Reaction to Mandatory Nonfinancial Disclosure." Management Science 65, no. 7 (July 2019): 3061–3084.  View Details

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