JULIE CANE - CEO, DEMOCRACY INVESTMENTS – A LEADERSHIP PROFILE OF WBM AWARD WINNER
JULIE CANE, CEO OF DEMOCRACY INVESTMENTS HAS BEEN SELECTED BY THE JUDGES OF WORLD BIZ MAGAZINE’S ANNUAL AWARDS TO BE A RECIPIENT OF THE TOP 100 CEOS IN INNOVATION AWARD 2021. THIS SELECTION PROCESS FOLLOWS A STRINGENT PROCESS THAT EVALUATED OVER 40,000 NOMINEES TO SELECT THE EXCLUSIVE LIST OF 100 WINNERS.
Julie Cane is the CEO and co-founder of Democracy Investments, a new asset manager focused on promoting democracy and influencing capital flows in financial markets. The Democracy Investments International Index is the first to re-weight an international equity index towards democracies and away from authoritarians, which is achieved by leveraging their exclusive license of the Economist's Democracy Index for financial products globally.
According to Julie, “Our goal is to decrease the cost of capital for democracies which can correlate to increased economic growth, and the reverse for authoritarian states. Additionally, by making investment proportional to democracy scores and never dropping investment in a nation to zero, we hope to create a market-based incentive for democratic reforms. Over time, Democracy Investments aims to influence capital flows in such a way that will encourage ALL countries to improve their democracy scores.”
Julie Cane’s 20+ year background in financial services includes developing market leading innovations at Wells Fargo, Charles Schwab Advisor Services, SEI Investments and Autodesk Ventures. While at Wells Fargo, Julie developed the Wells Fargo Private Bank’s first high net worth and segmentation strategies resulting in more than a 100% increase in the division’s profits during the next three years. At SEI Investments, she launched and marketed eleven new mutual funds and led the conversion of $500 million in common trust funds to private-label public mutual funds.
Julie began her career as a U.S. Naval Aviator flying the SH-3 Sea King helicopter conducting combat search and rescue training missions and torpedo recovery in San Diego and the Philippines. She currently serves as a Captain in the California State Guard supporting the 129th Rescue Wing at Moffett Field. Julie holds a BA from the University of Virginia and an MBA from the Anderson School at UCLA. Julie resides in the San Francisco Bay Area and enjoys running, biking and skiing.
Tell us about some of the key successes that have been achieved under your leadership in the last 12 months.
Last Summer, I brought together two partners to form Democracy Investments. Chris Browne, the Chief Investment Officer, is a Financial Services veteran with experience constructing multi asset portfolios for institutions and ultra-high net worth families at Franklin Templeton and he holds a CFA. Rick Rikoski, the Chief Economist, is a successful marine robotics entrepreneur with a PhD from MIT.
Last Fall, I negotiated an exclusive global license of the Economist’s Democracy Index for financial products. This was the first time the Economist granted such an arrangement. Democracy Investments uses this Index as an overlay to re-weight an international equity index to be over-weighted in democracies and under weighted in authoritarians.
Over the past 6 months, the team locked in strategic partnerships with a Distributor, Sub-Advisor, Legal, Compliance, Marketing and Web strategy. Over 50 people supported our ramp up for launch.
On March 31, 2021, the Democracy International Fund ETF (ticker DMCY) had its inception. The ETF tracks the Democracy Investments International Index (ticker DMCYNTR) with the methodology described above. In April, the company received strong support on social media, including a virtual ringing of the bell and an interview Judy Shaw at the New York Stock Exchange.
Tell us how important innovation is to your company and kindly provide some examples.
Innovation is foundational to our company and culture. We have created the first ETF that is both market capitalization AND democracy weighted. It tilts a market capitalization portfolio away from authoritarian regimes and toward more democratic ones. Our transparent and objective third-party standard, the Economist’s Democracy Index, performs these tilts in a systematic fashion. This allows investors to better align with their values of democracy, as well as providing market-based incentives for democratic reforms.
Our portfolio construction is also innovative. Instead of holding every 2,500+ security in the Index, we track with the same exposure using regional and country ETFs. This novel approach significantly lowers custody costs until we scale to $100M in AUM or more. This innovation allows us to keep our costs down and our fees competitive, to the benefit of our customers.
We plan to continue to innovate by developing other products with different geographic coverage, sector focus, as well as fixed income.
From the perspective of your customer, what values and product / service advantages make your company stand out in the market?
Our advantage is our exclusive license that allows us to leverage the Economist’s Democracy Index, which in our minds is the most robust measure of democracy in existence. Since 2006, the Index has tracked 60 indicators for every country rolling up into themes of Electoral Process, Functioning of Government, Political Participation, Political Culture and Civil Liberties. The exceptionally transparent Democracy Index is the perfect feedback mechanism. Any country can learn exactly how to increase their Democracy Score.
Our mission driven asset management company provides the first democracy focused financial product, leveraging the Economist’s Democracy Index. This allows our investors to invest in democracy and support ideals such as freedom of speech, free and fair elections and civil liberties.
Unlike the alternative international equity index products, the Democracy International Fund does not passively invest in securities in authoritarian countries. Our customers can feel good knowing they are supporting companies in democracies while receiving very similar returns to the benchmark.
Please tell us about any Corporate Social Responsibility and Sustainability initiatives at your company.
We are a small firm, as such our biggest contribution to social responsibility comes from the values embedded in our investment strategy. Democracies have far less issues with the environment or individual freedoms, as well as genocide, war and ethnic repression than authoritarian nations. At the company level, we run a lean operation, with all partners working from home to avoid the cost and environmental impact of going to an office. We are a woman-owned and veteran-owned business (WBE/VBE).
What improvements do you desire to see in your industry and how are you contributing to realising them?
We would like investors to be more conscious of the various externalities that come from passively investing in companies from authoritarian regimes. Interests like long term security, as well as environmental and human rights abuses are rarely factored into the equation. Our ETF seeks to remedy this by providing a transparent, objective and systematic method to address this problem.
In short, we are hoping to start a movement that supports democracies. As we scale, the capital flows will lower the cost of capital for democracies to fuel their economic growth and will raise the cost of capital for authoritarians to slow their economic growth. This will help to solve the current investment patterns that are pumping capital into authoritarians to the benefit of their economies and making it look like they have a better system than democracies, when in our opinion, they do not.
In your opinion, what makes a good leader?
Our team of leaders flow seamlessly back and forth from leading to supporting depending on the challenge and our expertise. This flexibility makes us all good leaders, especially during this fast-paced startup phase. Our team admires the Stockdale mission driven leadership principles and aspires to his level of selflessness and ability to motivate his people around a common mission.
I personally am also a huge fan of Stan McChrystal’s “team of teams” concept and admire his ability to create a network that combines transparent communication with decentralized decision-making authority.
Finally, a good leader exhibits empathy and brings contagious passion for the company’s mission. This is probably my strongest attribute. My former colleagues have praised the new energy I am bringing to our industry and my partners share the same enthusiasm for our mission to create a movement to support democracy.
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