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Robert Jeremy Goltho Grantham (born 6 October 1938) is a British investor and co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based
asset management Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets (physical objects such as buildings ...
firm. GMO had more than US$118 billion in assets under management as of March 2015. GMO has seen this number halve to US$65 billion in assets under management as of Dec 2020. He has been a vocal critic of various governmental responses to the
Global Financial Crisis Global means of or referring to a globe and may also refer to: Entertainment * ''Global'' (Paul van Dyk album), 2003 * ''Global'' (Bunji Garlin album), 2007 * ''Global'' (Humanoid album), 1989 * ''Global'' (Todd Rundgren album), 2015 * Bruno ...
from 2007 to 2010. Grantham started one of the world's first index funds in the early 1970s. In 2011 he was included in the 50 Most Influential ranking of ''
Bloomberg Markets ''Bloomberg Markets'' is a magazine published six times a year by Bloomberg L.P. as part of Bloomberg News. Aimed at global financial professionals, ''Bloomberg Markets'' publishes articles on the people and issues related to global financial ma ...
'' magazine.


Early life

Grantham was born in
Ware, Hertfordshire Ware is a town in Hertfordshire, England close to the county town of Hertford. It is also a civil parish in East Hertfordshire district. Location The town lies on the north–south A10 road which is partly shared with the east–west A414 (f ...
and grew up in
Doncaster Doncaster (, ) is a city in South Yorkshire, England. Named after the River Don, it is the administrative centre of the larger City of Doncaster. It is the second largest settlement in South Yorkshire after Sheffield. Doncaster is situated i ...
. He studied Economics at the
University of Sheffield The University of Sheffield (informally Sheffield University or TUOS) is a public university, public research university in Sheffield, South Yorkshire, England. Its history traces back to the foundation of Sheffield Medical School in 1828, Firth C ...
. In 1966, he completed an MBA at
Harvard Business School Harvard Business School (HBS) is the graduate business school of Harvard University, a private research university in Boston, Massachusetts. It is consistently ranked among the top business schools in the world and offers a large full-time MBA ...
.


Investment philosophy

Grantham's investment philosophy can be summarised by his commonly used phrase "reversion to the mean." Essentially, he believes that all asset classes and markets will revert to mean historical levels from highs and lows. His firm seeks to understand historical changes in markets and predict results for seven years into the future. When there is deviation from historical means (averages), the firm may take an investment position based on anticipated return to the mean. The firm allocates assets based on internal predictions of market direction. Grantham has been described as a contrarian investor and
permabear Market sentiment, also known as investor attention, is the general prevailing attitude of investors as to anticipated price development in a market. This attitude is the accumulation of a variety of fundamental and technical factors, including ...
. In 1971, Grantham helped established one of the earliest
index fund An index fund (also index tracker) is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that the fund can a specified basket of underlying investments.Reasonable Investor(s), Boston University Law Review, avai ...
s at Batterymarch Financial Management. The idea was unusual at the time and the fund was not a success.


Views on market bubbles and the 2007–2008 credit crisis

Grantham built much of his investing reputation over the course of his career by identifying speculative asset bubbles as they were unfolding. Grantham avoided investing in Japanese equities and real estate in the late 1980s during the peak of the
Japanese asset price bubble The was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan's economy stagnated. The bubble was characterized by rapid acceleration o ...
, and avoided technology stocks during the Internet bubble of the 1990s. A decade later, he limited his exposure to the housing bubble. Writing in ''Kiplinger'' in 2010, Elizabeth Leary noted that many of Grantham's predictions can be confirmed by analysis of his past newsletters. In a 2021 interview, Grantham distinguishes between identifying overpriced asset bubbles (which he believes is not particularly difficult), and predicting when such bubbles will collapse (which he admits is impossible, stating only that asset bubbles will eventually end at an uncertain future date). Grantham also acknowledges his strategy can underperform market averages for years, testing the patience of his clients, but he asserts that his strategy has always paid off long-term by avoiding overvalued assets. In GMO's April 2010 Quarterly Letter Grantham spoke to the tendency for all bubbles to revert to the mean saying: In his Fall 2008 GMO letter, Grantham commented on his evaluation of the underlying causes of the then-ongoing world credit crisis: Grantham focused on the issue of personal traits and leadership in trying to explain how we reached the current economic crisis.


Views on fossil fuels and the Keystone pipeline

Grantham has repeatedly stated his opinion that the rising cost of energy – the most fundamental commodity – between 2002 and 2008 has falsely inflated economic growth and GDP figures worldwide and that we have been in a " carbon bubble" for approximately the last 250 years in which energy was very cheap. He believes that this bubble is coming to an end. He has stated his opposition to the
Keystone Pipeline The Keystone Pipeline System is an oil pipeline system in Canada and the United States, commissioned in 2010 and owned by TC Energy and as of 31 March 2020 the Government of Alberta. It runs from the Western Canadian Sedimentary Basin in Alb ...
on the basis of the ruinous environmental consequences that its construction will bring to Alberta and to the entire planet due to the contribution that burning the extracted oil would make to
climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
.Charlie Rose Sho
Interview with Jeremy Grantham
. Retrieved 11 May 2013


Timber investment

Grantham is known to be a strong advocate for investments in the
timber industry Lumber is wood that has been processed into dimensional lumber, including Beam (structure), beams and plank (wood), planks or boards, a stage in the process of wood production. Lumber is mainly used for construction framing, as well as fini ...
that also relies on trees for
biomass Biomass is plant-based material used as a fuel for heat or electricity production. It can be in the form of wood, wood residues, energy crops, agricultural residues, and waste from industry, farms, and households. Some people use the terms biom ...
/ biofuel (
wood chips Woodchips are small- to medium-sized pieces of wood formed by cutting or chipping larger pieces of wood such as trees, branches, logging residues, stumps, roots, and wood waste. Woodchips may be used as a biomass solid fuel and are raw mater ...
). The potential conflict of interest with Grantham's philanthropic engagement for the "beyond coal" campaign of the
Sierra Club The Sierra Club is an environmental organization with chapters in all 50 United States, Washington D.C., and Puerto Rico. The club was founded on May 28, 1892, in San Francisco, California, by Scottish-American preservationist John Muir, w ...
was criticized in Jeff Gibbs' documentary Planet of the Humans.


Philanthropy

Grantham, together with his wife Hannelore, established the Grantham Foundation For the Protection of the Environment in 1997. Substantial commitments have been made to
Imperial College London Imperial College London (legally Imperial College of Science, Technology and Medicine) is a public research university in London, United Kingdom. Its history began with Prince Albert, consort of Queen Victoria, who developed his vision for a ...
, the
London School of Economics , mottoeng = To understand the causes of things , established = , type = Public research university , endowment = £240.8 million (2021) , budget = £391.1 mill ...
and the University of Sheffield, to establish the Grantham Institute - Climate Change and Environment, the
Grantham Research Institute on Climate Change and the Environment The Grantham Research Institute on Climate Change and the Environment is a research institute at the London School of Economics and Political Science founded in May 2008. The centre is a partner of the Grantham Institute for Climate Change at ...
and th
Grantham Centre for Sustainable Futures
respectively, which will enable the institutions to build on their extensive expertise in climate change research. The 2011 tax filing for the Grantham Foundation for the Protection of the Environment shows the Foundation donated $1 million to both the
Sierra Club The Sierra Club is an environmental organization with chapters in all 50 United States, Washington D.C., and Puerto Rico. The club was founded on May 28, 1892, in San Francisco, California, by Scottish-American preservationist John Muir, w ...
and to
Nature Conservancy The Nature Conservancy (TNC) is a global environmental organization headquartered in Arlington, Virginia. it works via affiliates or branches in 79 countries and territories, as well as across every state in the US. Founded in 1951, The Natu ...
, and $2 million to the
Environmental Defense Fund Environmental Defense Fund or EDF (formerly known as Environmental Defense) is a United States-based nonprofit environmental advocacy group. The group is known for its work on issues including global warming, ecosystem restoration, oceans, and h ...
that year. The Foundation has also provided support to
Greenpeace Greenpeace is an independent global campaigning network, founded in Canada in 1971 by Irving Stowe and Dorothy Stowe, immigrant environmental activists from the United States. Greenpeace states its goal is to "ensure the ability of the Earth ...
, the WWF, Rare and the Smithsonian. From 2006 to 2012, The Grantham Foundation for Protection of the Environment funded a $75,000
prize A prize is an award to be given to a person or a group of people (such as sporting teams and organizations) to recognize and reward their actions and achievements.
for environmental reporting. The prize was administered by the
University of Rhode Island The University of Rhode Island (URI) is a public land-grant research university with its main campus in Kingston, Rhode Island, United States. It is the flagship public research as well as the land-grant university of the state of Rhode Island ...
's Metcalf Institute for Marine & Environmental Reporting. In August 2019, he dedicated 98% (approximately $1 billion) of his personal wealth to fight climate change. Grantham believes that investing in
green technologies Environmental technology (envirotech) or green technology (greentech), also known as '' clean technology'' (''cleantech''), is the application of one or more of environmental science, green chemistry, environmental monitoring and electronic devi ...
, is a profitable investment in the long run, claiming that decarbonizing the economy will be an investing bonanza for those who know it’s coming.


Awards and honours

Grantham was elected a member of the American Academy of Arts and Sciences. With his wife, Hannelore, he received the Carnegie Medal for Philanthropy. He was appointed
Commander of the Order of the British Empire The Most Excellent Order of the British Empire is a British order of chivalry, rewarding contributions to the arts and sciences, work with charitable and welfare organisations, and public service outside the civil service. It was established ...
(CBE) in the 2016 Birthday Honours for philanthropic service to climate change research. *2009 Honorary degree, Imperial College, London. *2010 Honorary degree,
The New School The New School is a private research university in New York City. It was founded in 1919 as The New School for Social Research with an original mission dedicated to academic freedom and intellectual inquiry and a home for progressive thinkers. ...
, New York. *2012 Honorary degree, The University of Sheffield.


See also

* Edward Chancellor, worked with Grantham at GMO * Everything bubble


References


External links


GMO Website

The Grantham Foundation

Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over ForeverJeremy Grantham on population growth, China and climate sceptics
by Leo Hickman,
The Guardian ''The Guardian'' is a British daily newspaper A newspaper is a periodical publication containing written information about current events and is often typed in black ink with a white or gray background. Newspapers can cover a wide ...
15 April 2013
Jeremy Grantham on global economy , CNBC Television , published on Mar 7, 2019 , youtube.com


{{DEFAULTSORT:Grantham, Jeremy Living people American investors Alumni of the University of Sheffield Harvard Business School alumni People from Ware, Hertfordshire People from Doncaster Commanders of the Order of the British Empire 1938 births Giving Pledgers 21st-century philanthropists