New Valhalla Venture Exploration

An inquiry into the intersection of business, values, and investing

I am considering a new business venture under the Valhalla banner: Valhalla Investment Services, a registered investment advisor differentiated by a values-based approach to portfolio construction.

This idea has been simmering since I first got into the financial services business in 1998. My initial time in the business was incredibly interesting: I was registered to sell investment and insurance products and trained on how to ask for referrals. In the absence of referrals, I was compelled to make “cold calls” to people, oftentimes directly out of the phone book.

With no useful network to speak of, I found myself in a small cubicle on Calder Way above The Cheese Shoppe, making calls to people at 7-8pm, oftentimes interrupting a young family’s dinner.

But the mantra of the salesman — “…if the lady wants red shoes, you sell her the red shoes…” — struck me as especially pervasive and harmful in financial services. I remember wondering, as I was reading a book about investing in the stock market in 1999 written by Harry Dent, Jr., whether the industry was doing investors more harm than benefit by playing to their nature: telling stories to fan fires of greed and “fear of missing out” as the animal spirits of markets go on “up and to the right” tears, while encouraging excessive conservatism for long-term funds during market corrections with promises of redeployment when market excesses had been “wrung out” of the system.

Now, thirty years later, I am confident my early instincts were right. The people telling these stories — these red shoe-salesmen — had no more ability to identify when market excesses had been sorted than I had to identify when these excesses were creating unreasonable risk; To state it clearly, I have no such ability. Neither do they.

Of course, by the time Harry Dent wrote his book warning about a market crash, the crash had already occurred; And at the time he wrote his earlier book, a crash was actually quite close; Red shoes anyone?

During this same early period of my career (roughly 1998–2002), I became aware of what was then called Socially Responsible Investing (SRI)—an idea that felt, at the time, both intuitive and underdeveloped. My practice with clients as I was building my book emphasized how to best understand their priorities through questions that explored objective “facts” like income, household expeditures, assets, and liabilities, but also “feelings and values” about subjective matters like parenting philosophy and philanthropy.

I started a practice of asking clients — existing and prospective — about whether it was important to them that their investments mirrored their values.

Oftentimes this resulted in a question lobbed back at me. “What do you mean?” “Why would I care about that?” “How do other people view that?”

Most investors concluded after some discussion that they weren’t concerned about reflecting their values within their portfolios. Some clients were interested, to a limited extent, and were comfortable incorporating strategies from mutual fund sponsors such as Calvert, an early pioneer in SRI that would later be acquired by Eaton Vance and, ultimately, Morgan Stanley.

I became convinced that the market called for more thoughtful approaches to support investors who care about values-based investing.

I am not certain precisely when I became interested in the topic of ethics and morality; I know it was a regular topic of discussion (argument?) in our home. We never used words like deontology or utilitarianism; We occasionally discussed the specific ideas of Smith and Marx; The nature of my parents’ very progressive politics typically stood in contrast to the conservatism I was exploring and drawn to (eventually amplified by Hayek’s Serfdom.) So, this area of “ethical investing” seemed quite interesting, if not vague, to me.

I took time to study the Calvert model; I learned about other providers of SRI solutions and eventually registered with different Broker-Dealer and Investment Advisor relationships geared towards clients interested in these models. But, as our business grew and we focused more on commercial clients, especially their needs for group health benefits and qualified retirement plans, I also spent less and less time working with individual investors.

SRI receded into the background of my consciousness. I pointed my attention elsewhere.

In the meantime, my professional experiences and life experiences continued to reinforce a world view that, while prone to excesses and market failures, capitalism and market dynamics are the greatest source of improved welfare for the USA, and indeed the world, as any other historical factor.

During my time at NYU-Stern, I found myself reflecting on this issue again. During lectures in class with Ingo Walter and Brad Hintz, as we discussed global finance’s market structure, I found myself reflecting once again on the inherent and pervasive conflicts of interest present in the space, as well as the importance of global finance in supporting the needs of investors and, broadly, society.

Where do we go next with this idea?

In the spirit of exploring this business idea further, we will continue to engage in all the typical business planning practices: we already have a draft budget, framework for sources/uses of capital, and outline to a business plan. I am not sure if the best idea in this space will emphasize services to family offices, institutional investors, or “more common” retail investors. Perhaps we will determine the best solution should be geared for money managers.

One way we are thinking about the space is like this:

• Framework-focused: There are a handful of clear frameworks for how to think about values-based investing including faith-based, values-based negative screens, the Sustainability Accounting Standards Board, and the Global Impact Investing Network.
• Services-focused: There are a handful of providers who license services to support execution on values-based investing strategies including MSCI, Sustainalytics, and ISS ESG.
• Product-focused: There are 40 Act providers with investments that incorporate aspects of this approach to investing including Calvert, iShares, Vanguard, and TIAA-CREF.
• Advisory-focused: There are also investment advisors with their own models and approaches, many of whom outsource aspects to the vendors described above. This domain is highly fragmented, though, and seems to be in a consolidation phase.

One area I wonder about is whether “mom and pop” investors would view any such solution to match values to portfolio construction as relevant or actionable. I suspect that a large number of people are very thoughtful about the connection between their values and their day-to-day lives. This kind of moral reasoning is not apparent to me in the works of Sartre, Camus, or Parfit. I wonder if it is more shaped by popular culture, though sometimes clumsily. In this film-clip, a favorite filmmaker of mine, Kevin Smith, captures this general thoughtfulness better than most philosophers ever will:

So, as we explore possible next steps and pathways, I will be making outreach to people to continue my exploration of this idea. I have some interviews scheduled with finance professors and practitioners, investors, religious clergy, and philosophers. Topics we will explore include:

• What do investors expect from the marketplace? Is there a gap in the marketplace for products and services to better match investors demands for “values-based” solutions?
• What are service providers doing to serve the market demand for “values-based” investment solutions? What are the current providers of services doing and where are there gaps, leading to opportunities for an entrant?
• With respect to the segment of the marketplace that includes “responsiveness to my values” as a valued attribute of an investment product or service, how is that segment further understood? How big is it? Is some percentage secular? Jewish? Christian? Are certain models (negative screens) preferred/more effective to others?
• Fundamentally, who is best positioned to act as the moral arbiter in values-based investing: asset managers, ratings agencies, regulators, advisors, or clients themselves?

On this final bullet, I don’t yet have a settled answer. What I do have is curiosity and skepticism. I believe the question deserves serious treatment.

If you’re interested in talking with me about it, I’d welcome the conversation.

I hope you all have a wonderful day!

Jens Thorsen on February 8, 2026 at 2:49am

P.S. Homework response from Global Financial Architecture with Profs Walter and Hintz, which I was reflecting on recently, when we decided to begin exploring this new venture.

QUESTION:  Describe two secular industry trends which are impacting the asset management industry today and (b) comment on how the CEO of a traditional mid-sized mutual fund firm, which has historically specialized in managing active equity products, might choose to respond to these trends.

RESPONSE:  Two secular trends impacting the asset management industry are continued growth at rates greater than GDP and continued shift towards “low cost” passive solutions as an investment strategy.

Global assets under management for 2017 were $85 trillion.  This is expected to grow to $110-$130 trillion by 2022.  The regional concentration of this wealth tends to be largely concentrated in the North America and Europe.  A large concentration of this wealth is also concentrated within the elderly cohorts, as well as relatively few numbers of households.  For example, in the USA greater than 75% of wealth is held by 30% of the population.

Within the US growth anticipated in AUM, continued growth in both Defined Contribution plans and IRA balances are notable.  Of the $18 trillion US qualified money balances, approximately $9.6 trillion is split across DC ($4.7 trillion) and IRA balances ($4.9 trillion).  Amongst this balance, $4.9 trillion is invested in mutual funds.  Furthermore, DC balances are anticipated to grow at 7-8% CAGR.

The continued shift towards “low cost” passive solutions is arguably driven by the lack of performance by active managers over time.  Where US domestic equity mutual fund costs run approx. 63 bps, US indexed solutions (both mutual funds and ETF) can run 80% less, in the range of 10-15 bps.  As a result, baseline anticipated growth for ETF solutions are expected 13% CAGR through 2025, while ETF and indexed mutual funds already account for 15% of the market.

The industry is broadly fragmented.  Research by Miguel A. Ferreira and Sofia B. Ramos show that the US asset management business is highly competitive.  However, in certain segments the industry is much more consolidated;  For example, Vanguard, Blackrock, and State Street control 94% of the ETF market.  Interestingly, despite the lower fees in these passive solutions, margins are relatively high:  “ETF margins are at least 45% and potentially much higher (80%+) for select products.”

When considering strategies for a mid-sized mutual fund to position for the future, it is important to recognize how, broadly, the strategic options traditionally considered in business (i.e. cost reduction or differentiation) are implemented in the asset management industry:  performance (i.e. alpha generation), marketing strategies (e.g. focused on channel of distribution, such as retail vs private banking), and product mix (e.g. low fees/Vanguard, private label/Fidelity.)  I would recommend a differentiation strategy focused on distribution and product mix be considered based upon the following activities:  introduce a suite of mutual funds, equity and debt, which are competitive from cost and pricing perspectives, and include faith-based and/or socially-responsible screens that include specific marketing to providers of defined contribution solutions, as well as IRA providers.  By positioning within these growing segments, and presenting a value to ultimate investors (401k account holders and IRA beneficiaries) you create an opportunity to differentiate the product and, with reasonable costs, create an improved “stickiness” of these funds because the buyers are purchasing a value-system (much like purchasers of diamonds from Tiffany’s are purchasing a promise about the supply chain and avoidance of conflict diamonds).