Law + Finance
Law + Finance
Claudio Rojas, Managing Director at Hurt Capital Inc., has outperformed many of the world's greatest investors for almost a decade. A forthcoming manuscript – Eclipse of the Public Corporation Revisited: Concentrated Equity Ownership Theory – reveals the economic basis for this outperformance, which extends beyond idiosyncratic stock selection abilities.
Claudio has published research in the University of British Columbia Law Review, a highly ranked peer-reviewed law journal. His primary research interest is in the integration of legal and economic analysis, with particular emphasis on the impact of ownership structure and governance on economic efficiency. His innovative work bridges the gap between scholarly inquiry and real-world application.
Claudio is a business lawyer and corporate finance professional with a specialization in complex areas of intersection between law and finance. He is a published scholar with a Master of Business Administration (MBA) from the Ivey Business School, Juris Doctor (JD) from Western University (Canada), has passed all three levels of the Chartered Financial Analyst (CFA) examinations, is a member of the European Corporate Governance Institute (ECGI), and a founding member of the Institute for Founder Centric Studies (IFCS) – a bold scientific initiative to reimagine securities law and corporate governance.
Keynote at Ivey Venture Forum 2018
Keynote at Western University
Keynote at Fundica Toronto
Global Shareholder Engagement & Activism Summit
World Angel Investment Summit – Montréal, Canada
TieCon Canada 2017 – Ottawa, Canada
Moderator, "Building Companies with Global Impact" at Ivey Venture Forum
The 21st Century Company – New York City
Corporate Governance and Shareholder Access
Dodd-Frank and The Future of Shareholder Engagement
TIME WARNER CENTER
10 ON THE PARK
60 COLUMBUS CIRCLE
NEW YORK, NY
MANAGING DIRECTOR, HURT CAPITAL INC.
FOUNDING MEMBER, INSTITUTE FOR FOUNDER CENTRIC STUDIES
"My passion is investing in, advising and helping to construct the world’s most enduring technology companies.”
Hurt Capital Inc.
Active in two core business areas: Capital Investment and Venture Capital. These activities are synergistic due to, among other attributes, domain expertise in founder-oriented ownership structures and consumer-oriented technology – alongside an exceptionally long-term entrepreneurial mindset. Has established a track record in identifying world-class companies, investing during periods of uncertainty, and holding for the long term.
Hurt Capital Inc. is a research-driven investment and venture capital platform. Since 2008, Hurt Capital’s investments in the capital markets have outpaced the S&P 500 by a wide margin. This success is attributed to an investment methodology rooted in intensive research, alongside the traditional value investing principles taught by Ben Graham at Columbia University in the 1930’s and espoused by Warren Buffett with much success in recent years.
Institute for Founder Centric Studies (IFCS)
A scientific initiative to reimagine securities law, corporate governance, and 21st century global enterprise with a view to revitalizing economic growth and reducing economic inequality. IFCS leverages research at the intersection of law, economics, finance and other related disciplines, to reimagine the structural foundations of securities law and corporate governance in a world with increasing levels of concentration between ownership and control.
Dentons LLP (Fraser Milner Casgrain LLP)
Engaged in matters related to general corporate commercial law practice, with an emphasis on mergers and acquisitions, securities and corporate finance. Dentons (formerly Fraser Milner Casgrain) is now the world's largest law firm with approximately 6,500 lawyers and professionals in more than 120 offices spanning 50-plus countries across Africa, Asia Pacific, Canada, Central Asia, Europe, the Middle East, Russia and CIS, the UK and the US.
Ontario Securities Commission
Corporate Finance Branch
Advised on issues related to regulating reporting issuers and issuer-related policy initiatives. The Ontario Securities Commission (OSC) administers and enforces securities law in the province of Ontario, Canada. The OSC's mandate is to provide protection to investors from unfair, improper and fraudulent practices, and foster fair and efficient capital markets and confidence in capital markets. The OSC establishes the regulatory framework for securities offerings in the public and exempt markets, as well as take-over bids, and monitors legal and regulatory compliance of publicly-traded companies.
March 2018 – Working Paper
Artificial intelligence (AI) and Blockchain are infrastructure technologies historically analogous to desktop operating systems and internet communications.
Public controversy surrounding both AI and Blockchain echo back in time to widespread media dialogue in the 1980's and 90's on the potentially deleterious effects of computing power on the autonomy and security of the individual.
AI is the operating system of the future in its capacity to augment human productivity and enhance complex decision-making. Operating systems, such as Microsoft Windows and Mac OS, facilitated user-friendly information processing, specifically access to information and specialized software in data and word processing. As AI research advances and moves to commercialization, tools will become available to better aggregate, process and decipher complex and disparate information. As a result, AI holds the promise of enhancing human cognitive function, and offsetting asymmetries in intellectual and knowledge-based decision-making.
Blockchain will reduce the frictional costs of economic transactions in a manner reminiscent of the internet's power to facilitate the rapid frictionless transfer of information – the so-called information superhighway. Blockchain and its derivative cryptocurrency technology hold the promise of disrupting financial and economic transaction intermediaries in a manner reminiscent of the impact of the internet and email on the telecommunications industry.
Dominant platforms to enable widespread consumer and enterprise adoption of AI and Blockchain have yet to emerge. However, user-friendly operating systems or software to enhance cognitive human capacity and facilitate economic transacting will usher in a new age of productivity and global growth – provided rising public and regulatory concerns regarding their adoption can be alleviated.
The Promise of Artificial Intelligence and Blockchain to Reduce Economic Inequality
November 2017 – Working Paper
Economic disparity, a significant underlying cause of human suffering and misery, is highly correlated with preventable disease, political unrest, and breakdown in basic social infrastructure.
Financial technology (FinTech) has the capacity to alter the status quo like never before in human history, specifically by leveraging – (1) artificial intelligence to reduce informational or knowledge-based asymmetries, (2) blockchain and cryptocurrency to protect micro-savings against local currency collapse, (3) accessible digital platforms to provide access to global capital markets for financing local projects, and (4) investment technologies to allow for modest savings to accrue in micro-temporal increments with minimal fees and in lock-step with the world's most sophisticated investors.
Economic disparity is defined as having two core components: (1) income inequality from low wages, and (2) capital inequality from relatively scant opportunities to invest or protect savings, particularly in countries experiencing political turmoil and where the rate of return to global capital (r) is greater than the local economic growth rate (g).
This work posits that artificial intelligence and blockchain have the capacity to reduce the capital inequality component of economic disparity.
Corporate Governance and the 21st Century Company: How is Value Created and For Whom?
Nov 2017 – Working Paper
This article, based on research shared during a speaking engagement in New York City, elaborates upon a new framework for understanding the corporate governance responsibilities of directors and managers in publicly-traded companies.
The broad category of corporate governance is defined as having two components: (1) business governance, closely tied to the historical origins of corporate governance and a focus on aligning the interests of managers and shareholders, and (2) social governance, represented by the Environmental, Social and Governance (ESG) movement in recent decades. This innovative corporate governance framework provides added clarity on the duties of directors and managers in terms of business performance, as distinct from the responsibility of managers to be cognizant of – and to take action where appropriate – when corporate decisions have broader impacts on society and the public good.
Corporate Governance and Shareholder Access: Dodd-Frank and The Future of Shareholder Engagement
November 2017 – The 21st Century Company
Panelist with Hank Boerner, Co-Chairman, Governance & Accountability Institute, Inc.;
Chris Pinney, President and CEO, The High Meadows Institute;
Josh Zinner, Chief Executive Officer, Interfaith Center On Corporate Responsibility, Inc.
Rise of Canadian Fintech (Financial Technology and Digital Banking)
September 2017 – World Angel Investment Summit 2017
Canada has been recognized as one of the best markets to build and test innovative FinTech solutions and has among the highest concentrations of technology firms outside Silicon Valley.
Presented research on founder centrism, and the impact of ownership structure and governance on economic efficiency in financial technology companies. Introduced hypothesis of Founder Centric Platforms – an emerging bank ownership structure with re-aggregated customer centric verticals under a single value enhancing platform.
Panelist with Paul Desmarais III, Power Corporation of Canada;
Dan Robichaud, Diagram Ventures;
Brendan Holt Dunn, Holdun Investments
Long Termism: Has It Influenced Activist Engagement Objectives and Strategy?
September 2017 – Global Shareholder Engagement & Activism Summit
Panelist with David Conklin, Partner, Goodmans LLP;
Cambria Allen, Corporate Governance Director, UAW Retiree Medical Benefits Trust;
James Hamilton, Director, Investment Stewardship, BlackRock;
Douglas S. Smith, Managing Partner, Blackmoor Investment Partners Limited.
Interview with the European Corporate Governance (ECGI)
April 2017 – Founder Centrism in Technology Companies
June 2017 – This research piece was written at the invitation of the Business Law group at the University of Oxford and is based on a forthcoming manuscript titled 'Eclipse of the Public Corporation Revisited: Concentrated Equity Ownership Theory'.
The era of the U.S. public corporation is in decline. Tectonic shifts in seemingly disparate regions of the corporate landscape are underway. Through the lens of a new theory of the firm, these phenomena are eerily consistent with Harvard Professor Michael Jensen's bold prediction in Eclipse of the Public Corporation (1989). Yet, much debate in securities law and corporate governance continues to be premised upon the 1932 Berle-Means corporation, marked by a separation between share ownership and managerial control. Eighty-five years later, that ownership structure is being displaced by a more robust organizational form that is particularly suitable to exponential innovation and growth in highly competitive markets – conceptualized as the founder centric firm... [read more]
May 2017 – Working Paper (Forthcoming)
For almost a decade, the author has outperformed many of the world's greatest investors. This working paper reveals the economic basis for this outperformance, which extends beyond idiosyncratic stock selection abilities.
Concentrated equity ownership theory, an economic discovery made in 2007, explains the rise of founder centric firms over the subsequent decade. This paper introduces a dynamic unifying governance model, while uncovering theoretical links between otherwise disconnected economic phenomena.
In illustrating theoretical continuity in the seemingly disparate investment styles of Jorge Paulo Lemann with 3G Capital, William A. Ackman with Pershing Square Capital Management, and Warren Buffett with Berkshire Hathaway, the author identifies hidden economic efficiencies powering the world's largest companies from Apple to Facebook, Google and Amazon.
The novel economic theory presented in this paper also outlines legal and extra-legal mechanisms driving macroeconomic phenomena, specifically those at play in Canada and Silicon Valley - distinct geographic regions uniquely situated for robust economic performance over the next century.
This working paper is forthcoming and builds upon the theoretical foundations established in "An Indeterminate Theory of Canadian Corporate Law" (peer-reviewed manuscript, published in the University of British Columbia Law Review, 2014)
Redefining the Business and Social Dimensions of Good Corporate Governance
August 2017 – Working Paper
This paper explores the origins of corporate governance, rooted in mitigating agency costs flowing from the separation of share ownership and managerial control identified by Berle and Means in their 1932 seminal work 'The Modern Corporation and Private Property'. In analyzing the conflicts and responsibilities of companies in both public and private markets, a new governance framework is introduced to address the rise of control structures in public markets and advent of large venture-backed private corporations. The terms 'business governance' and 'social governance' are defined as components within the broader concept of 'corporate governance'.
In examining the role of securities regulators in enforcing social governance under "comply or explain" frameworks, the corporate law regime is presented as an optimal mechanism for extending social responsibility to all large corporations, while reducing regulatory burden and levelling the playing field for publicly-traded companies to better compete with privately-held counterparts.
Collaborative Activism: Shareholder Engagement for the Long Term
July 2017 – Working Paper
This work examines the trajectory of shareholder activism from shorter term financial engineering – which reached an apex in the 1980s – to newly emerging forms of operational activism focused on longer term business fundamentals. The current paradigm is defined by antagonistic activism, which distracts management and places corporations in suboptimal competitive positions during activist campaigns. In contrast, collaborative activism is presented as a more suitable form of value enhancement. Collaborative engagements focused on contributing operational acumen, particularly in the absence of an ethical dominant shareholder or stewardship-oriented CEO, result in greater levels of economic efficiency as compared to traditional forms and modes of activism. A paradigm shift from 'antagonistic/financial' activism to 'collaborative/operational' engagement is predicted.
Rewarding Legacy: Breaking the Short Term Barriers of Equity Compensation
June 2017 – Working Paper
The limits of equity compensation and performance pay are explored through the lens of concentrated equity ownership (CEO) theory. In corporations with concentrated ownership structures, equity compensation falls short in incentivizing longer-term decision making. Incorporating concepts imported from behavioural economics, the construct 'legacy compensation' is introduced as a non-monetary interest alignment tool in concentrated ownership structures.
The Way Forward: Powering Canada's Rise in the Innovation Economy
April 2017 – Working Paper
Over the next two decades, with bold leadership from all levels of government and the private sector, the Canadian Innovation Triangle – marked by Montréal, the Toronto-Waterloo Corridor, and Vancouver – has the potential to become the nexus of a value creation engine that rivals the economic output of ‘Silicon Valley’. This work posits that fostering growth in founder centric technology companies – from early stages to well-beyond IPO – is a crucial step in Canada’s economic transformation.
January 2017 – Working Manuscript
This work's raison d’être – is to put within your reach, valuable lessons from the world’s greatest business founders.
This is a series of stories like no other written in history – a manuscript of lessons exclusively for company founders, startup entrepreneurs, and future unicorn CEOs. Transporting these great leaders across time and space... bringing them to your side, as advisers, counsellors, mentors... through their most personal stories... in their moments of peril.
Never before have words of wisdom been captured from such a broad cross-section of leaders from young and old, newspaper publishing to technology, and Eastern Hemisphere to Western Hemisphere. Despite this work's controversial title, exceptionalism is not exclusive to any geographic region or culture. Nonetheless, much inspiration can be drawn from America's exceptional economic engine.
Up close and personal, the most difficult periods... in the lives of the world's most accomplished entrepreneurial founders. When all was almost lost, when their vision was drifting out of focus. Find inspiration and learn from their most challenging moments.
In all cases, this work is a series of lessons in the unshakeable tenacity needed to build a venture, a cautionary tale in never giving up control over your vision, and the absolute necessity of protecting the engine that drives exceptionalism – Founder Control™.
December 2016 – Business Law Advisory Council, Ministry of Government and Consumer Services
Contributed research to the Ministry of Government and Consumer Services on the economic efficiencies within certain founder centric ownership structures – with a view to advancing Canada’s economic prosperity and competitiveness as a jurisdiction of choice for entrepreneurial activity, investor engagement, and business expansion.
The Business Law Advisory Council is tasked with making recommendations to reform laws that are responsive to changing business priorities and supportive of a prosperous economy. Modernizing business laws is part of the government's economic plan to build Ontario up and deliver on its priority of growing the economy.
October 2015 – Ministry of Government and Consumer Services
Submission regarding the province of Ontario's Business Law Agenda: Priority Findings and Recommendations Report for reform of Ontario’s corporate and commercial legislation. Contributed research on the unique characteristics of Ontario’s capital markets with regard to concentrated share ownership patterns and the inherent efficiencies of founder centric ownership and voting structures.
The Ministry of Government and Consumer Services is responsible for the legislative framework governing businesses registered in Ontario. The Business Law Policy Consultation is part of a governmental commitment to advance legal frameworks that are responsive, flexible and adaptable to the needs of technology companies. These legislative reforms are part of a broader commitment to ensuring that Ontario’s legislative structure facilitates an efficient market and prosperous economic climate.
June 2015 – Canadian Securities Administrators (CSA)
Submission to the Canadian Securities Administrators (CSA) with comments regarding proposed amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and changes to National Policy 62-203 Take-Over Bids and Issuer Bids. Contributed research on concentrated share ownership patterns, economic efficiency and corporate governance – in connection with the regulation of hostile take-over bids in Canada.
The CSA, comprised of securities regulators in 10 provinces and 3 territories, is responsible for developing a harmonized approach to securities regulation across Canada. By collaborating on rules, regulations and other programs, the CSA streamlines the regulatory process for companies seeking to raise investment capital and others working in the investment industry.
January 2014 – University of British Columbia Law Review (peer-reviewed)
This publication, in a highly ranked peer-reviewed law journal, establishes the foundation of a distinct economic theory for the enhanced efficiency of business corporations. This research challenges the dominant paradigms of shareholder primacy and stakeholder theory, while positing that inherent efficiencies exist within certain concentrated ownership structures.
This manuscript has powered a highly scalable ten-year track record in the capital markets that rivals those of the world’s greatest investors. In expanding this theory’s real-world applications to technology companies and other innovative businesses, the author actively engages with founder centric ownership structures.
The Activist Shareholder Model and Good Corporate Citizen Theory
April 2009 – Faculty of Law, University of Western Ontario (Canada)
Proposed a novel theoretical framework, employing concepts at the intersection of law and economics, for the analysis of significant developments in Canadian corporate law. Engaged in extensive research on issues pertaining to concentrated ownership structures, shareholder remedies, and corporate governance.
Get in touch
Get in touch