Research That Can Help Us Improve, Epistemic Institutions, Economic growth
Because of their non-standard goals, longtermist funders should arguably follow investment strategies that differ from standard best practices in investing. Longtermists place unusual value on certain scenarios and may have different views of how the future is likely to play out.
We’d be excited to see projects that make a contribution towards producing a pipeline of actionable recommendations in this regard. We think this is mostly a matter of combining a knowledge of finance with detailed views of the future for our areas of interest (i.e. forecasts for different scenarios with a focus on how giving opportunities may change and the associated financial winners/losers). There is a huge amount of room for research on these topics. Useful contributions could be made by research that develops these views of the future in a financially-relevant way, practical analysis of existing or potential financial instruments, and work to improve coordination on these topics.
Some of the ways the strategies of altruistic funders may differ include:
Mission-correlated investing. That is, making investments such that they end up with more money in worlds where money is relatively more valuable. This increases the expected amount of good done. In some cases, but not all, it will also reduce the variance in the amount of good done (‘mission hedging’).
Non-standard views on expected financial returns. Longtermist investors should arguably have non-standard attitudes toward and definitions of risk (including correlation with other longtermists). This could make certain investments more attractive. In addition, if altruistic research suggests more accurate views of the future this may also be a useful source of excess returns. Furthermore, longtermists may want to operate with a discount rate that differs from normal (either more or less patient).
As is already part of our approach, some investments may also generate impact of their own or have strategic value via developing relationships in new areas.
Note: This builds on an idea from a recent post by Holden Karnofsky. However, I don’t see it in your current project ideas list nor in the other comments here.
I have had a similar idea, which I didn’t submit, relating to trying to create investor access to tax-deductible longtermist/patient philanthropy funds across all major EA hubs. Ideally these would be scaled up/modelled on the existing EA long term future fund (which I recall reading about but can’t find now, sorry)
Edit—found it and some ideas—see this and top level post.
You may be interested in the following project I’m working for: https://deeptransitions.net/news/the-deep-transition-futures-project-investing-in-transformation/ . The project goal is developing a new investment philosophy & strategy (complete with new outcome metrics) aimed at achieving transformational systems change. The project leverages the Deep Transitions theoretical framework as developed within the field of Sustainability Transitions and Science, Technology and Innovation Studies to create a theory of change and subsequently enact it with a group of public and private investors. Would recommend diving into this if you’re interested in the nexus of investment and transformation of current systems/shaping future trajectories.
I can’t say too much about future plans at this stage, except that following the completion of the current phase (developing the philosophy, strategies and metrics), there will be an extended experimentation phase in which these are applied, tested and continuously redeveloped.
Investment strategies for longtermist funders
Research That Can Help Us Improve, Epistemic Institutions, Economic growth
Because of their non-standard goals, longtermist funders should arguably follow investment strategies that differ from standard best practices in investing. Longtermists place unusual value on certain scenarios and may have different views of how the future is likely to play out.
We’d be excited to see projects that make a contribution towards producing a pipeline of actionable recommendations in this regard. We think this is mostly a matter of combining a knowledge of finance with detailed views of the future for our areas of interest (i.e. forecasts for different scenarios with a focus on how giving opportunities may change and the associated financial winners/losers). There is a huge amount of room for research on these topics. Useful contributions could be made by research that develops these views of the future in a financially-relevant way, practical analysis of existing or potential financial instruments, and work to improve coordination on these topics.
Some of the ways the strategies of altruistic funders may differ include:
Mission-correlated investing. That is, making investments such that they end up with more money in worlds where money is relatively more valuable. This increases the expected amount of good done. In some cases, but not all, it will also reduce the variance in the amount of good done (‘mission hedging’).
Non-standard views on expected financial returns. Longtermist investors should arguably have non-standard attitudes toward and definitions of risk (including correlation with other longtermists). This could make certain investments more attractive. In addition, if altruistic research suggests more accurate views of the future this may also be a useful source of excess returns. Furthermore, longtermists may want to operate with a discount rate that differs from normal (either more or less patient).
As is already part of our approach, some investments may also generate impact of their own or have strategic value via developing relationships in new areas.
Note: This builds on an idea from a recent post by Holden Karnofsky. However, I don’t see it in your current project ideas list nor in the other comments here.
I have had a similar idea, which I didn’t submit, relating to trying to create investor access to tax-deductible longtermist/patient philanthropy funds across all major EA hubs. Ideally these would be scaled up/modelled on the existing EA long term future fund (which I recall reading about but can’t find now, sorry)
Edit—found it and some ideas—see this and top level post.
Just going to note that SBF/FTX/Alameda are already setting a very high benchmark when it comes to investing!
A systemic change investment strategy for your review.
You may be interested in the following project I’m working for: https://deeptransitions.net/news/the-deep-transition-futures-project-investing-in-transformation/ . The project goal is developing a new investment philosophy & strategy (complete with new outcome metrics) aimed at achieving transformational systems change. The project leverages the Deep Transitions theoretical framework as developed within the field of Sustainability Transitions and Science, Technology and Innovation Studies to create a theory of change and subsequently enact it with a group of public and private investors. Would recommend diving into this if you’re interested in the nexus of investment and transformation of current systems/shaping future trajectories.
I can’t say too much about future plans at this stage, except that following the completion of the current phase (developing the philosophy, strategies and metrics), there will be an extended experimentation phase in which these are applied, tested and continuously redeveloped.