Blunt comments from Chamath Palihapatiya on China’s oppression of Uyghurs lay bare the hypocrisy of wealthy investment managers.
Chamath Palihapatiya isn’t the first billionaire to stick his foot in his mouth, but he is the most recent one after eye-raising comments on China in a podcast interview recently.
“Every time I say that I care about the Uyghurs, I’m really just lying if I don’t really care,” billionaire investor and former Facebook (FB) – Get Meta Platforms Inc. Class A Report executive Palihapatiya said on a podcast. “It’s not a priority for me.”
Immediately, his comments were met with a firestorm of criticism, with many expressing outrage at the indifference to a human rights abuse in China’s westernmost Xinjiang province that is tantamount to genocide, according to the BBC.
“His comments are not unique, however,” said TheStreet’s Kevin Curran in Real Money. “Rather, they are merely a more honest reflection of recent comments by even more lauded investors.”
That list includes Bridgewater Associates CEO Ray Dalio, who likened the repressive practices of Beijing’s government to those of a “strict parent” in December, and Daily Journal Corporation (DJCO) – Get Daily Journal Corporation Report frontman and Berkshire Hathaway vice-chair Charlie Munger, who outright lauded the Chinese government in some of its authoritarian policies.
“However, in this era of socially responsible investing (SRI) and Environmental, Social, and Governance (ESG) principles that, rather obviously, would frown upon investing in industries reliant upon slave labor and genocidal practices the ignorance or even apathy towards these issues is growing stale,” Curran wrote.
Increasingly, conscientious investors are willing to put their money where their mouth is.
“The problem appears to lie in managers’ willingness to forego promising investments should they conflict with these principles,” Curran said. “This presents not only a major catch-22 for the likes of Palihapatiya and Dalio, but the big investors signing over large mandates to these managers.”
Other money managers agree.
“Talk is cheap, and I have always been suspicious that the ESG talk from prominent financiers was hollow,” Fergus Hodgson, director of the financial consultancy firm Econ Americas, told Real Money. “The challenge for these men is that they both want to appear noble in corporate circles, but also want to profit from immense opportunities in China’s centrally planned market. These investors will, therefore, come up with all sorts of mental gymnastics to gloss over and rationalize the plain truth that they are getting into bed with tyrants.”
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