The Daily Signal - Do Your Financial Investments Undermine Your Values?

Episode Date: February 13, 2025

Conservatives across the country might be supporting leftist causes through their investments but have no idea they are doing so. A new investment services consulting company is working to change this.    “Prospr Aligned is committed to equipping institutional investors with the tools, insights, and partnerships necessary to ensure their investments deliver reliable returns and reflect the values of their investors and beneficiaries,” according to Derek Kreifels, the company's CEO.    Through Prospr Aligned, Kreifels says he helps “institutional investors across the country make sure that their assets are being managed in a way that is actually aligned with their values.” While this might sound simple, Kreifels says, “you would be surprised how many investors are not aware of how asset managers are voting their shares.”    Prospr Aligned advises both clients of private and public investment funds on the best investments they can make, placing the priority of financial returns first, while also ensuring investments are not in contradiction with a client's values.  Before launching Prospr Aligned, Kreifels headed the State Financial Officers Foundation for 12 years and served as the Assistant State Treasurer of Kansas for the five years prior. Kreifels joins “The Daily Signal Podcast” to discuss values-based investing and the unique mission of Prospr Aligned. Learn more about your ad choices. Visit megaphone.fm/adchoices

At Desjardin, we speak business. We speak equipment modernization. We're fluent in data digitization and expansion into foreign markets. And we can talk all day about streamlining manufacturing processes. Because at Desjardin business, we speak the same language you do. Business. So join the more than 400,000 Canadian entrepreneurs who already count on us. And contact Desjardin today.

We'd love to talk, business. Conservatives across the country might be supporting leftist causes through their investments, but have no idea they are doing so. But there's a new investment service consulting company that's working to change this. Welcome to this Daily Signal bonus edition. I'm Virginia Allen, and today I am so pleased to be sitting down with Derek Crifles. He serves as the CEO of the brand new organization, Prosper Aligned. Prosper Aligned is all about putting needs of investors first and making wise financial investments, while at the same time making sure that the values that investors are putting their money into, that the values of those companies match that

of the investor. Derek Kreifles is the former head of the state financial officers foundation. He was there for 12 years, and prior to that, he served as the assistant state treasurer of Kentucky. He has decades of knowledge in the area of finances and making wide. investments for Americans. And I'm so excited to have him join us today to talk about the work of Prosper Aligned and how they are putting values-based investment first. Stay tuned for my conversation with Derek Kreifles right after this. As conservatives, sometimes it feels like we're constantly on defense against bad ideas, bad philosophy, revisionist history, junk science, and divisive politics. But here's something I've come to understand. When faced with bad ideas,

it's not enough to just defend. If we want to save this country, then it's time to go on offense. Conservative principles are ideas that work, individual responsibility, strong local communities, and belief in the American dream. As a former college professor and current president of the Heritage Foundation, my life's mission is to learn, educate, and take action. My podcast, The Kevin Roberts Show, is my opportunity to share that journey with you. I'll be diving into the critical issues that plague our nation, having deep, deep,

conversations with high-profile guests, some of whom may surprise you. And I want to ensure freedom for the next generation. Find the Kevin Roberts Show wherever you get your podcast. Well, it is my pleasure to be joined today by Derek Kreifles. He is the CEO of Prosper Align, which is a brand new organization that just launched in January. And I'm wondering if you can tell us a little bit about how you came from serving as the head of the State Financial Officers Foundation. to then kind of closing that chapter and jumping into this new organization called Prospera Line. Share a little bit about that decision and what you all do. Yeah, well, thank you, Virginia, first of all, for having me here at The Daily Signal. We, you know, have had the opportunity to be a voice to your viewers and readers over the years in the conservative movement.

So we really appreciate the work that you all do here. You know, working with the state officials, state financial officers around the country was a dream job. It was a 12-year commitment to really just, you know, serving these men and women who stepped up and, you know, put their political necks on the line to do what was right in the lead. And, you know, as the last few years evolved, we definitely got more involved, you know, during the Biden years into ESG, anti-ESG and DEI and all of those issues. And one of the things as I was traveling around and I would speak at different meetings and different groups, I would talk about is, you know, we need more. more private sector solutions. In other words, we need more companies to start and help providing solutions for some of these state government pension funds that were being weaponized.

And so some folks started putting their heads together and they came to me and said, we want you to be the CEO of this new company called Prosper Aligned. And what was fun about it for me was it was really a continuation of some of the work that I did at SFOF and now get to help. help institutional investors across the country make sure that their assets are being managed in a way that is actually aligned with their values. I mean, it seems like a simple thought, but you would be surprised how many investors are not aware of how asset managers are voting their shares.

And that's, so that's really what we are laser focused on. And you all refer to that as values alignment. And that's something that you really specialize in. And if you would just kind of give a little bit more of like practical examples of if you're going in and consulting with a client, how do you go about making sure that where their money is going also aligns with their values? Well, full disclosure, Heritage is not a client. Yeah. But Heritage Foundation is a great example where you all are choosing to make sure that your assets are now being activated in a during shareholder season. you know, companies like IBMs, CVS, Airbnb that Heritage announced recently that they are pushing back on those publicly traded companies for different political issues where they had direct ownership of some of those assets.

And what the companies were doing and some of the proposals they were voting on were complete misalignment to Heritage's core values. We all know Heritage Foundation, what all the different issues that you all represent and the way. and I always call you the firewall for the nation's conservative movement. If we lose heritage, we all lose. Like, it is truly is that. So it's really, it's awesome to see Heritage Foundation start pushing back in that way and creating their own shareholder proposals, becoming an activist shareholder to say,

hey, we're tired of you publicly traded company Alphabet or Airbnb pushing against Israel or pushing against, you know, promoting DEI, initiatives or pushing a, you know, a pro-abortion drug at your drug store. And so, so that's what we do is we go into a company or to a government entity and we say, you know, let us look under the hood of your assets. We shine light. You know, light is a great disinfectant, right? Like, so to bring transparency to how asset managers behavior is not only at shareholder season, but also, you know, frankly, some of the coalitions that they join, you know, whether they're part of this, you know, what, climate action 100 or they might be part of some other coalition that is working

nefariously against the core values or the core economic engine of a state government, like oil and gas, for example. And so, so that's why we're called Prosper Aligned. You know, the hope is, is that we can bring some alignment. And we do that in a way that's very confidential and quiet so that we can help them fix the problems that they have without creating any kind of embarrassing situation or, you know. Yeah, that's critical. That's critical. Doing the homework.

Yeah, absolutely. Well, you have a long resume of working in this field. We've talked a little bit about it already, but you also served as the assistant state treasure in Kansas. Yeah. Share if you would a little bit about how that experience influenced your own approach to investing. Yeah, that's a great question. You know, my boss, who I'll plug Ron Estes, it was a great man,

was state treasurer. I was his deputy and chief of staff. He now serves in Congress from the Wichita, Kansas area, serves on ways and means. He's a great, great leader. And so it was, it was easy working for a great leader, right? When you have great leadership, everybody involved in the organization is on board and going in the right direction. And so watching him make decisions. He was one of the early leaders, though, that would start to talk about some of this social investing and say, look, the pendulum is going one way. We're going to go, you know, we're not going to, we're going to divest from countries like Iran or Venezuela or whatever. And, you know, he said, now watch because it's going to go back the other way and they're going

to start, you know, others are going to start calling for divestment of Israel. And so he kind of saw the writing on the wall really early on. And I think, you know, As time went on, it became clear that, especially after the Biden administration came into office, that the conservatives were a decade, at least behind the eight ball in terms of realizing how organized the left had gotten to making sure that they could weaponize the investment process of a lot of institutional investors by proposing these, you know, these proposals on, you know, DE and. and ESG and LGBTQ rights and all these other, you know, social issues that should be discussed. And I think my boss agreed with me on this and still does to this day. Those issues should be discussed in the halls of Congress across the street, not in a boardroom or at a, you know, publicly traded company shareholder meeting. Yeah.

Especially when it comes to retirees benefits, right? Like it's not fair to the hardworking firemen or police officer who's pension. whose pension they've worked their entire life for, and they're really counting on to be there when they're ready to retire. And some group is playing politics with it. Yeah. And so I think, you know, he was always a very kind of pragmatic, reasonable thinker leader,

and I think I got that from him. But then the whole environment changed after he left and went to Congress. And so we had to become more of a fighter. Yeah. So. Well, not even that gets into the issue, a little bit of debanking. And another kind of looking at, all right, where we've seen conservatives kind of be pushed out of that space because they won't get in lockstep with whatever the DEI or that woke initiative is. Obviously, I was this example with saying Sam Brownback as well.

Yeah. Yeah. And it is a great example. You know, I love elections have consequences, right? You know, we just heard President Trump at Davos calling out Brian Moynihan, the CEO of Bank of America from stage, you know, as he does. As a wild moment. You know, talking about how debanking needs to stop. And, you know, I give kudos to Sam Brownback, you know, former ambassador for religious freedom, former U.S. Senator, governor of Kansas.

Because if it weren't for him standing up to J.P. Morgan Chase when when his group, the National Committee for Religious Freedom was debanked, you know, we wouldn't be here today. where J.P. Morgan now is backing away from some of those initiatives. You know, I use this example that when I'm talking to a group of institutional investors, especially in the faith community about Sam Brownback, most of them are appalled to hear, you know, that J.P. Morgan Chase would, you know, debank, you know, somebody like Sam Brownback or a group that he was involved with. But the problem is, is most of those institutional investors,

later his work would lead to a gentleman named David Bonson, who had his own proposal, to help to try to push J.P. Morgan from stopping the practice of debanking. And that proposal only got 2% of the vote by shareholders that were involved in that shareholder vote. Wow. So that means that in a room like that, on average, about 98% probability that 98% of those folks voted against Sam, you know, the proposal that would have helped stop debanking and voted against Sam Brownback. Interesting. And so that's the huge education gap that we're having.

Like in issues like debanking and all these other issues is investors aren't even aware that they're voting either in favor of a bad thing or against a good measure. And that's where we come in. Yeah. Really, really critical. Yeah. I think there's, I feel like there's an evolution that has happened a little as things have gotten really wild and kind of crazy in some ways on this investment. side and the left has been pushing so hard with this ideology. I want to read a quote here from yourself. You in the past have said investment decisions should prioritize financial returns and long-term

stability over political and activist agenda. What caught you to kind of move away from that approach in investing a little bit to some extent? Well, I think most of what the moving away from an agenda, I've always said that fiduciary duty should be the rule, right? I've served as a trustee on a state pension board. I've seen those decisions be made. I would amend that quote, though, to say that just like there's, you know, news here recently that Oklahoma treasurer Todd Russ. Yeah, so I wanted to ask you about it.

You know, he is, he's the first red state to use his own investment funds that he has direct oversight of to push back on a few companies that he believes are doing wrong. So, you know, I think most of the time when a conservative says, we want you to stop doing something, the left or the fake news, the fake media will instantly say that you're being super right-wing, super conservative, when really what we're asking for is kind of neutrality. You know, we started this whole back and forth with just asking for banks to be banks, asset managers to be asset managers and to stay out of the politics. But that hasn't been what's happened. And the left has really pushed to such an extreme that now it is going

to take some activism on some of these institutional investors part to come back and push back to neutral. Yeah. Yeah. I think that's critical because you can't, it's a pretty big weed and maybe multiple to really pull out of these leftist companies. We're starting to see, I mean, the story that I think was in Bloomberg recently, the story about Todd Russ, you know, multiple institutional investors. And I think they mentioned Heritage Foundation, the National Center for Public Policy Research and a couple other organizations. But you're starting to see conservative groups wake up to this. And there's a lot of really smart people that are much smarter than me that are helping with a lot of these proposals. And they're doing great work.

I want to get back a little bit to your resume, if you don't mind. So while you were at state financial Officers Foundation and heading there, you launched the public fiduciary network with over $3 trillion in assets. How exactly did that initiative inform the work, has it already, and will it continue to prosper aligned? Yeah, well, we realized that a lot of our state officials served as fiduciaries on their pension funds or other state investment funds of some kind, like in Texas, the permanent school fund. It was like an $80 billion oil and gas royalty fund that helps support public education in Texas. Yeah. Those individuals weren't statewide elected officials that were serving as state financial officers, but our state financial officers really had an interest in connecting with those other

board members and helping them, helping educate them on some of these ESG and DEI issues so that when they had their, their, you know, semi-monthly or monthly pension meetings, they would be well-informed and educated and had material to help them ask the right questions as a fiduciary on these huge funds. And so we launched that initiative in spring of 24, I guess, so just last year, had our first in person gathering, had several of the state officials were there that were on. but we also got some folks who were representatives from blue states that were equally appalled and shocked and offended that their teachers union pension funds were being weaponized in a way politically that they shouldn't be. Even if they agreed with the political issue at hand, the fact that they were leveraging these beneficiaries retirement dollars was offensive.

So, you know, I think at that one of those first meetings, we had a representative from, you know, probably three or four different blue states. And, you know, and we treated that with discretion because we knew that, you know, they go back to the blue state and they, you know, say, hey, we were at the public fiduciary network event that SFOF hosted. It would be a problem for some of them. But they, but some of them have, you know, many of these pension boards are appointed by maybe the governor and then by maybe a minority leader in the Senate. And so that's how we were able to get some cross-pollination philosophically and from some of the blue and purple states to participate in it. It's no easy task. No, no, it's not. It's a big deal.

Now, you all offer something called voting consulting. Oh, excuse me, yeah, called voting consulting. If you would, talk a little bit about just what that is, the proxy voting consulting, how it operates and how folks can take advantage of it. That's right. So part of our corporate engagement program at Osper Aligned, you know, we can help somebody that wants to be an activist shareholder like Todd Russ. You know, we can help make sure that the back and forth between the publicly traded company and the SEC and all the filings that everything are correct and meet the deadlines they need. But we can also just help someone understand how their shares are being voted. So proxy consulting for us really is, again, that transparency light.

we're going in and showing you how your asset managers are actually voting on all of those different proposals, thousands of proposals every shareholder season. We've got all of the folks on our team that can do that. And so that's what we do a lot. And when I talk about going under the hood and kind of looking at that, that's kind of where it starts. It's like, let's see how your assets were voted maybe last year or the year before. Maybe we do a three or four year kind of look back. because some asset managers have evolved and changed over time and maybe didn't vote as wildly

pro-ESG, for example, in 24 that they maybe did in 21, 22, or 23. And so we give them that view and then arm them, arm that state official or that board with the data, and then they can go and make the decisions. And sometimes, and we haven't talked about this, the proxy advisory services, ISS and Glass Lewis. They've got 90% in the market share. They do a lot of advising in proxy voting. They make a lot of statements about the guidelines that they're going to be using. And sometimes we can check that out too and make sure that what ISS or Glass Lewis is telling an institutional investor they're advising on their votes to the asset manager. We can double

check that and make sure that everybody's being honest. Yeah, critical. When you look at whether, you know, conservative or moderate or those that, you know, don't have any sort of kind of political sway one or another, you know, other folks that are kind of doing this in the industry, what would you say separates prosper, align from any other consultants? I'm not aware of anybody else that does what we do. That's awesome. Which is a good place to be in. It is. You know, we definitely have a wind in our sale with the new administration and, you know, the statements and the executive orders that have come out against the EI and against, you know, ESG and some of this other stuff. So we really are, you know, for a long time in the institutional investment space, there were a lot of opportunities for blue states to have their voice heard, you know, Calper Zilpers, other states have been really activist pension funds.

The red states and the more conservative institutional investors, clients, religious organizations, they've been left out of the table. Like we're bringing them to the table for the first time to really empower them, give them their voice. Because for years, we've known this as a problem. And the point of view that a lot of our organizations have has sadly been left out. And so we're bringing that back. So critical. So what does the future hold? You all have just launched at the beginning of the year.

What are your sights set on for this year? I mean, it's an adventure, you know, working with. talking with multiple states. We hope to have several announcements later in the year, working with different state funds, you know, different elected officials, appointed officials, and not just states, you know, hopefully some cities and county governments as well. You know, we are talking to a lot of groups and foundations in the conservative movement that we want to help. And they're, you know, really just helping the entire industry see that they're, needs to be, you know, we need to create a seat at the table for that red state slash conservative

point of view. You know, our goal is with a state official, we go in with a whiteboard and say, what do you need to meet your goal? Like, how can we help you? And, you know, really at the end of the day, we want to make them the hero, right? Like we, I'm okay if we're never mentioned in a story about what they're doing, you know, at the end of the day, we're making that elected official, that appointed official or whoever is responsible and in charge of those beneficiaries, just dollars, we're making them the hero. Yeah. For any state officials, local officials who are listening or maybe staff members who work for

those folks, if they want to get involved, if they want to learn more, how do they do that? Yeah, they can go to prosperalline.com and reach out to us. We are, you know, flying around the country and speaking about it. And so happy to, I'm on LinkedIn personally and always, welcome the private messaging and get a lot of those these days. Excellent. Well, Derek, thank you. And thanks for the work you guys are doing, your willingness to share it here today.

And we're really excited here at the Daily Signal to watch the work of Prosper Aligned unfold this year. It's an exciting year. Virginia, thank you very much. Really appreciate the time and the opportunity. Of course. Our pleasure. Thanks again for joining us for today's show. Don't forget to hit that subscribe button so you never miss out on brand new shows from the Daily Signal podcast.

We'll see you right back here this afternoon for Top News. in 10. The Daily Signal podcast is made possible because of listeners like you. Executive producers are Rob Louis and Katrina Trinko. Hosts are Virginia Allen, Brian Gottstein, Tyler O'Neill, and Elizabeth Mitchell. Sound design by Lauren Evans, Mark Geinney, John Pop, and Joseph Von Spakovsky. To learn more or support our work, please visit DailySignal.com.