Ashby H. B. Monk

Stanford University | SU · Department of Civil and Environmental Engineering

Financing from institutional investors will be critical to achieving the sustainable development goals (SDGs) and curbing climate change. However, these large investors have been largely absent from multilateral initiatives to mobilise private capital. Partly as a result, such initiatives have been unable to reach the scale required for development...

This study aims to advance the understanding of and address the valley of death that is significantly widening in the clean energy domain due to its financing challenges. We conduct a case study on three new investment vehicles in the US energy sector (First Look Fund by Activate, Prime Impact Fund by Prime Coalition, and Aligned Climate Capital),...

Sovereign Wealth Funds (SWFs) are an emerging community of investment organizations, subject to the conflicting demands of international and domestic institutions. From the lens of variegated capitalism, one can explain their diversity and apparent contradictions by underlining how they embody negotiations between global and local institutional pre...

suggested citation: Monk, A. & In, S. Y. (2020). "Financial Innovation for Energy Innovation." The Brown Journal of World Affairs, (forthcoming).

Using a comparative case study of four independent infrastructure agencies in Australia, this article explores how governments can use structural ambidexterity to innovate. Independent agencies can serve as exploration units, but their innovation needs to be integrated into the rest of government. Instead of relying on an executive team to do it, i...

This study aims to advance the understanding of and address the valley of death that is significantly widening in the clean energy domain due to its financing challenges. We conduct a case study on three new investment vehicles in the US energy sector (First Look Fund by Activate, Prime Impact Fund by Prime Coalition, and Aligned Climate Capital),...

Infrastructure assets are networked, urban products that can only be understood through their social, economic, and physical geographies. Because of this, they remain difficult to value and monitor. Recently, financialization of infrastructure assets has codified this information for larger capital markets. But the local knowledge needed to underst...

Selling membership into society has taken on new life with the recent proliferation globally of Immigrant Investor Programs (IIPs). IIPs involve the sale of national membership privileges to wealthy foreigners, justified by their purported ability to stimulate economic development and attract engaged investor‐migrants. This paper surveys IIP object...

Significance We find evidence of racial bias in the investment decisions of asset allocators, who manage money for governments, universities, charities, foundations, and companies. This bias could contribute to stark racial disparities in institutional investing. In general, asset allocators have trouble gauging the competence of racially diverse t...

What is environmental, social, and governance (ESG) data and how do we evaluate its quality and effectiveness? This form of evaluation is important, as it is a precondition for investors trying to integrate ESG in investment decisions. Previous literature describes intrinsic properties of ESG data (e.g. multifaceted-ness and context dependence) and...

What is environmental, social, and governance (ESG) data and how do we evaluate its quality and effectiveness? This form of evaluation is important, as it is a precondition for investors trying to integrate ESG in investment decisions. Previous literature describes intrinsic properties of ESG data (e.g., multifaceted-ness and context dependence) an...

Leading regional development requires bringing diverse industries and actors together to create opportunities, innovation and resilience. However, this diversity increases the potential for conflicts between actors and their institutional logics. We therefore ask: how can actors build a field where diverse logics co-exist and interact to create the...

Financing from institutional investors will be critical to achieving the sustainable development goals and curbing climate change. However, these large investors have been largely absent from multilateral blended finance initiatives. Partly as a result, such initiatives have been unable to reach the scale required for development finance to go “fro...

New technologies in data science are allowing long-term investors to bring much more rigor to their operations. In this article the authors provide empirical examples in support of these data-driven advances, demonstrating their practical applications. They use the UC Investments office as their case study and discuss how adoption of advanced data...

Sovereign investors are an emerging community of investment organizations, subject to the conflicting demands of international and domestic institutions. Existing research interprets them either as mirroring global financialization or preserving national interests. Both top-down global influences and bottom-up local pressures seem to co-exist, but...

This study examines the relationship between returns and risks in low-carbon investing, with a particular focus on how financial markets evaluate a firm’s carbon management performance. Using a dataset of 120,050 observations from 1,715 U.S. companies for the period between January 2005 and December 2018, we construct a portfolio termed “Efficient-...

The increasing complexity and de-localization of finance has allowed for an obfuscation of fees, costs, and expenses, leading to distortion in the underlying incentives that are being created. This distortion is driving an increasingly short-term and disconnected financial world. Here it is argued that the world of finance and investment needs to b...

What social network structure enables the process of institutional emergence? This article combines a longitudinal network analysis of investments and cross-sectional interviews of stakeholders in the context of a regional development program to answer this question. Piloted by a Sovereign Development Fund (SDF), the program attracted US$ 50bn of i...

Chapter 3 focuses on the re-intermediating aspect of the collaborative model, explaining the idea that institutional investors need to re-engage with their asset managers in order to obtain greater alignment of interests. The chapter recognizes that asset managers can provide value to their investor clients under the right terms and conditions and...

This chapter introduces the key themes that will be looked at in this book. In particular, it looks at the problem of long-term investing, illustrating why institutional investors are not acting in a long-term manner and the repercussions that this has for wider society. It provides a clear distinction between asset owner investors who have monopol...

Chapter 4 presents actual case study examples of the vehicles that have been set up and represent the collaborative model. Whereas earlier chapters provided the theoretical explanation and validation for the collaborative model, Chapter 4 provides detailed explanations of eight investor-led co-investment platforms, joint ventures, and platform comp...

Drawing on social capital theory, this chapter provides the key theoretical validation for why it is crucial for institutional investors to build their social capital. It argues that one of the key value propositions of financial intermediaries is the network that they are able to tap into when facilitating the investment management process, whethe...

The role of financial intermediaries has come under close scrutiny in recent times as many of the practices of these service firms have been exposed for their opaque, rent-seeking and dishonest behavior. This book questions the traditional system of Financial Capitalism by examining how beneficiary organizations such as pension funds, sovereign wea...

The concluding chapter emphasizes the need for institutional investors to rely on their own network economies as well as the agglomeration economies that they have access to through financial intermediaries. Social capital managers can be instrumental in helping institutional investors take advantage of these networks. Responding to the current tre...

Historically, sovereign wealth funds (SWFs) have held portfolios primarily made of public equities and debt. However, in the last ten years, they have diversified to increasingly include alternatives and notably private equity. 61% of SWFs now hold some private equity in their portfolios. Together, SWFs held 17% of all global assets in private equi...

Sovereign Investors are the giants of the financial world. 15% of total global assets under management i , US $15 trillion, are projected to be in the hands of about 140 sovereign funds in 2020 ii. This is equivalent to about 6 times the GDP of France in 2016. It is also slightly more than the GDP of the USA, the first economy in the world in 2010...

As recent history highlights, there are numerous challenges in bringing novel energy technologies from the lab all the way to the global energy marketplace. But one challenge has proven particularly intractable; the lack of financing to help clean energy entrepreneurs overcome what is often called the "valley of death (VoD)." In this paper, we iden...

The idea of selling membership into society is not new, but it has taken on new life with the recent proliferation globally of Immigrant Investor Programs (IIPs). These programs involve the sale of national membership privileges to wealthy foreigners. They are justified by attractive policy objectives: to stimulate economic development and attract...

The global financial crisis and its aftermath put the structure and performance of the global financial services industry into sharp relief. Questions have been raised as to what intermediaries individually and collectively add to the production of investment returns and social welfare in general. In this article, we look at the roles and responsib...

A variety of macroeconomic factors have conspired against frontier investors globally. Pension funds in particular have been faced with the consequences of low interest rates, weaker growth prospects and ageing populations, leading to the ever-growing prospect that many will not be able to overcome their underfunded liabilities without doing someth...

The previous chapter stressed the importance of knowledge—of markets, of the organization and how the organization understands the markets and itself—in the investment management industry. At the centre of this knowledge development and management function rests the skills and competence of investment managers. If beneficiary financial institutions...

Around the world’s financial markets, the prudent person rule is seen time and time again as the guiding light for trustees, directors and fiduciaries of beneficiary investment organizations. In the US, for example, the rule says that fiduciaries must act solely in the interest of beneficiaries, ‘with the case, skill, prudence and diligence under t...

Venture capital investing has been an unsatisfactory experience for many long-term institutional investors (LTIs). First, the asset class has not performed in line with expectations for more than a decade. For example, these investors have given more money to venture capitalists since 1997, in aggregate, than they have had in return over that perio...

Social scientists and policymakers alike have become critical of the pervasive short-termism embedded within finance and its associated markets, institutions and agents. On the one hand, short-termism can be seen as a structural issue that manifests in a number of forms, from the powerful data-engines that offer near-instantaneous views of portfoli...

In its purest form, the financial system is simply the interface between people and entities that have capital and those that require capital, under conditions of risk and uncertainty. There are temporal dimensions as well as spatial dimensions. The parties concerned are probably working to different time scales and are likely to be dispersed geogr...

Thus far, our narrative has focused on beneficiary investors in middle to high-income economies. This is a simple function of where wealth is concentrated, and thus where a greater proportion of large beneficiary financial institutions are located. We would be myopic, however, if we did not include a discussion of potential frontier investors in th...

Financial markets have been the beneficiaries of a three-decade decline in interest rates. This has meant that generous passive market returns have added to overall portfolio returns. Adding value above market returns in this period was nice, but it was not critical for most funds to achieve their objectives. Looking to the future, however, we see...

If a reorganization of the functional and spatial structure of institutional investment offers some new ways to align interests, it also poses profound organizational and governance challenges. Indeed, the shifts in investment philosophy and execution that characterize innovative beneficiary institutions pose challenges and complications for invest...

Who holds the power in financial markets? For many, the answer would probably be the large investment banks, big asset managers, and hedge funds. These are the organizations that are in the media's spotlight and whose leaders and employees command outsized salaries and bonuses. They are the supposed leading edge of global finance and their power se...

As elaborated in our paper — Social Capital and Building an Institutional Investor’s Collaborative Network — a new “collaborative” model of investing lies at the heart of our re-intermediation thesis, and this model is premised upon institutional investors forming broad and deep relationships with investment partners to build their social capital....

Investment returns are produced by combining financial assets with human capital, the decision-making protocols of investment houses, and the electronic infrastructure that supports the flow of information about investment. At the center of the production process stand senior managers; their power and authority in the production process is fundamen...

In a slowing global economy with diminished confidence in the long-term prospects for public financial markets, many institutional investors are looking for innovative, alternative, and often private, investment strategies to meet elevated expected return targets. One source of potential inspiration has, perhaps surprisingly, come from the communit...

The global financial crisis and its aftermath put into sharp relief the structure and performance of the global financial services industry. Questions have been raised as to what intermediaries individually and collectively add to the production of investment returns and social welfare in general. In this paper, we look at the roles and responsibil...

The idea of selling membership into society is not new, but it has taken on new life with the recent proliferation globally of Immigrant Investor Programs (IIPs). These programs involve the sale of national membership privileges to wealthy foreigners. They are justified by attractive policy objectives: to stimulate economic development and attract...

By 2050, the world population is forecasted to reach 10 billion people, and consumption of natural resources is expected to increase four-fold above current rates. Radical resource innovation – across energy, agriculture, water, and waste – is required to prepare the world for this future. Without it, we risk irreversible climate change, military c...

The idea that superior knowledge is required to drive financial outperformance runs counter to some of the most pervasive theoretical frameworks used by investors today. The Efficient Market Hypothesis and the Capital Asset Pricing Model, for example, posit that capital markets are efficient and that no consistent outperformance can be generated wi...

A growing number of institutional investors are unhappy with the exposures they have to long-term alternative asset classes, such as private equity, infrastructure and real estate. This frustration has little to do with the underlying assets. Rather, it relates to the sub-optimal access points and governance structures that tend to intermediate ins...