Tesla has come under another bout of investor pressure from 12 pension funds, US state treasurers and asset managers. This time shareholders, including Denmark’s $21 billion Akademiker Pension and $279 billion NYC retirement systems, want CEO Elon Musk to get back to work, requesting he dedicate at least 40 hours a week to the company.

In a letter to Tesla chair Robyn Denholm, they called on the company to address “deficiencies in the board’s oversight of company leadership” writing “the current crisis at Tesla puts into sharp focus the long-term problems at the company stemming from the CEO’s absence, which is amplified by a Board that appears largely uninterested and unwilling to act in the best interest of all Tesla shareholders by demanding Mr. Musk’s full-time attention on Tesla.”

The ultimatum came as Musk announced his plans to leave his government post in the Trump administration overseeing the Department of Government Efficiency (DOGE). But as well as calling for any new compensation plan for Musk to include the condition that he spends at least 40 hours per week managing the company, investors want other changes too. They expressed their concerns regarding Musk’s commitment to his privately held companies including SpaceX, Neuralink, the Boring Company and xAI.

“Given his leadership roles at four private companies and his foundation, the Board must ensure that Tesla is not treated as just one among many competing obligations,” the letter read.

previous calls for change ignored

The letter is the latest call for change from increasingly frustrated investors who either plan to divest, or have already.

In March, AkademikerPension, which invests on behalf of Denmark’s academics, announced plans to exclude Tesla from its investments if there is no sign of reform at this June’s AGM. CEO Jens Munch Holst cited Musk’s increasing interference in US and European politics as a particular grievance. Musk visibly backed the far-right Alternative for Germany (AfD) party ahead of the country’s February elections.

“It’s no secret that Tesla has been a market leader in the green transition for years. But when we can tick off a long list of issues year after year with no prospect of improvement, in fact quite the opposite, it’s hard to argue that we should remain invested,” he said.

AkademikerPension has also complained about governance and board independence, given Musk’s family and friends on the Tesla board which includes his younger sibling, Kimbal Musk. Union resistance and workplace issues have also long troubled the investor, which wrote to Tesla back in 2023 with fellow Danish funds KLP, PKA and Folksam, urging the company to respect collective bargaining.

Last April, Swedish pension provider KPA Pension announced that it had divested its entire shareholding in Tesla following a period of “fruitless” engagement regarding its concerns about the company’s attitude towards employees’ union rights.

“Tesla’s attitude towards its employees’ union rights is problematic in terms of KPA Pension’s investment criteria. KPA Pension has therefore tried in various ways to influence the company, primarily together with other owners, where proposals have been submitted to the company’s annual general meeting for two years in a row. Unfortunately, no improvement has been seen and a decision has therefore been made to divest the holding,” wrote Marcus Blomberg, head of asset management and sustainability, on KPA’s website.

In 2023, the $44 billion PensionDanmark also sold its $69 million holding because of concerns around workers’ rights.

Elsewhere Dutch civil service scheme, the €552 billion Stichting Pensioenfonds ABP, sold its Tesla stake earlier in the year. Speaking to Top1000Funds.com, Ronald Wuijster, chief executive officer of APG Asset Management which oversees ABP’s assets, said the investor had sold a €571 million ($585 million) stake in the company as part of an optimisation strategy in the index portfolio.

“For us, investments are made according to four elements comprising return, risk, cost and sustainability, and that hasn’t changed,” he said.

In the letter this week, the 12 investors also called for Tesla to start developing a succession plan, and be ready for both “planned and unplanned or an emergency’” departure of Musk. They also requested the appointment of an independent director with “no personal ties” to other board members. This month, the electric vehicle company appointed John Hartung, the outgoing Chipotle chief financial officer as a director, whose son-in-law is employed by Tesla.

“It is striking that Tesla would nominate a director who, by objective standards, does not appear to be independent—particularly to a board already criticized by investors and the Delaware Chancery Court for its lack of independence,” the letter said.

Tesla’s stock price has plunged by more than 24 per cent since peaking in December 2024. Sales tumbled in the first quarter of this year due to a consumer backlash in Europe, fierce competition from China’s BYD, the world’s best selling electric vehicle maker, and weakness in the company’s home market.

James Davis joined the C$27 billion ($19 billion) Canadian pension fund OPTrust as chief investment officer a decade ago, and since that day has been driving the fund on a path towards a total portfolio approach to managing money. 

Davis told the Top1000funds.com Fiduciary Investors Symposium at Harvard University that OPTrust believes TPA is the best way to deliver the sustainability of pension payments that its members want. 

It’s taken time to get there and to shift the mindset of the organisation from being an asset manager to being a pension manager, Davis said, but that is now starting to be seen in behaviour across the organisation. 

“When I joined, the one thing I noticed about OPTrust was we had super-skilled, talented and successful people, good performance, deep teams, but [we were] very siloed and the mission was missing,” Davis said. 

“We saw repercussions of that, like hoarding of capital, a misunderstanding of risk and so forth. My belief was that TPA could make us better. So notice I said the word ‘belief’.  

“TPA is a belief system, and I think for us, it’s the most aligned to what our members want.” 

Davis said members want sustainability of pensions and “to know that they can count on their benefits today and well into the future”. 

“TPA recognises that while alpha is important, alpha alone does not pay pensions. Total returns pay pensions,” Davis said. 

Davis said there is no single model or method for implementing TPA, so how OPTrust went about it worked for its requirements but may not be appropriate for all funds. 

“For us, TPA is a journey. Every journey has a destination; for us that is plan sustainability… being fully funded, having a stable contribution rate and benefits, sustainability is best measured by the level and the drawdown potential of our funded status. So the metric that matters the most is the funded status. 

“We’re not trying to improve the funded status. We just want to stay comfortably above 100 per cent and try to keep it as stable as possible.” 

Davis said for OPTrust, that means maximising total returns at an acceptable level of risk, in a context where “risk-free returns are not enough for us to keep the plan sustainable”. 

“We have to take risk, and it’s how we take that risk that’s really important,” he said. 

“Risk is scarce – that one of our beliefs in our TPA philosophy – and has to be shared, and we must use it purposefully and efficiently,” he said. 

Capital competition

Davis said that competition for capital is also critical to implementing TPA, and OPTrust begins that process by dividing its portfolio into two large pools: liquid and illiquid assets. Portfolio construction is driven by a belief that the best opportunities for value creation lie in illiquid assets, so an early decision is “how much illiquidity are we willing to accept?” 

“And then we commit capital to that,” he said. But once the fund is committed to that, it uses its liquid asset holdings to achieve the overall total portfolio risk profile it wants, given the risk profile already dictated by its illiquid assets. 

 “At the end of the day, this liquid program acts as a completion portfolio, so it considers what’s happening in the plan; liabilities; what’s happening in the market today, in the economic environment; and what is our overall risk profile in our liquids portfolio,” Davis said. 

“And then this completion portfolio, which is the true role of the liquid portfolio to complete the overall risk profile of the plan, that’s where everything begins, from there.” 

Davis said the concept of total portfolio risk is critical. 

“We think about it, again, in terms of funded status,” he said. 

“So we use a value-at-risk measure, except it’s not value-at-risk around returns, it’s value-at-risk around funded status. What are the chances that our funded status is going to fall, and how much are we willing to accept? 

Constructing a portfolio – the mathematical and actuarial aspects of it, at least – are one thing; there is also a significant cultural and human-behaviour barrier to overcome when shifting an investment organisation onto a TPA footing. 

“So first of all, we’ve got a mission: sustainability of the plan,” Davis said. 

“I need to set an investment objective that’s aligned with the overall mission; we’ve done that. I need to make sure my strategy is appropriate and aligned with the objective. And then I need to make sure my culture is supporting the overall strategy.” 

Davis said that “culture stuff is really, really important, and that’s a huge chunk of the journey that we’re on now”. 

“I need a collaborative culture,” he said. “I need a culture of continuous improvement; a total portfolio mindset. Stop thinking about your own little silo and start thinking about the big picture. We’re moving there – not 100 not there, but we’re moving there.” 

Davis said a balanced scorecard is the right way to deal with the so-called “soft stuff”. “Not everything has a hard number,” he said. “A lot of things are squishy, and you don’t really know how to evaluate them. We’re taking a red, amber, green – a RAG approach, Thinking Ahead Institute, Roger Irwin, way of thinking about this.” 

Investment teams typically want to be set clear objectives, and then to be assessed against those objectives. 

“Do this, do that, do the other thing, and then we’ll evaluate you whether your meets or exceeds expectations,” he said. Unfortunately, Davis said, such an approach doesn’t help the fund do its job any better. 

“We need the support of the entire organisation for us to be able to be able to deliver on this challenge of plan sustainability,” he said. 

“They have to see themselves in this; they have to believe that at the end of the day, they’re making a contribution, and we have to be able to reward them too. So this is really, really important.  

“And what I would say…in terms of challenges and where we are, at the heart of TPA is acting as a team, coming together with a common mission, collaborating, recognising we have to share resources. It really is about culture, it’s about a total portfolio mindset, and it’s about continuous improvement. So this never ends.” 

Venture capital funds need to “break the tyranny” of their typical 10-year cycle as it is choking the funding for innovative sectors whose commercial value takes longer to be realised, said Harvard Business School professor Josh Lerner. 

Speaking at the Top1000funds.com Fiduciary Investors Symposium at Harvard University, Lerner – who is also director at not-for-profit Private Capital Research Institute – said the fact that VC portfolios are increasingly concentrated in a narrow band of sectors is a worrying sign. 

The number of US startups receiving a first round of funding from VC is highest in the software and business and consumer product sectors. Since 2015, more than 3500 – and sometimes more than 4000 – companies have received VC funding each year, while that number is 1500 or less for startups in biopharmaceutical, medical devices, telecommunications and other hardware sectors, according to Lerner’s research.  

“If you think about the venture [capital] game, a lot of it is putting a little money in, figuring out whether something works or not, and putting a lot more chips on the table,” he said. 

“The problem is, for much of this tough tech area, that game just doesn’t really work as well.”  

For example, Lerner said, investors might have to sink billions of dollars to build a fabrication plant before knowing if it can produce viable chips or if there is market demand.  

“Unlike code, which has this beauty of if you get it to run once, it’ll run an infinite number of times, the real-world is a bit of an ugly place,” he said.  

Lerner acknowledged that reasons why these so-called deep tech ventures, such as healthcare and clean tech, are difficult to invest in are multifaceted. Venture capital funds’ 10-year set-up and the need to return investor capital within that time frame is only one of them. 

They also tend to have lower relative returns compared to highly commercialised areas like IT due to capital intensity and the time needed to de-risk the underlying technologies.  

In addition, the broader deep tech industry structures present challenges – energy, materials and the majority of healthcare markets are often complex, ridden with regulations and with low margins. The government is also an important and sometimes primary customer. 

While venture capital and corporates have never historically been big funders of long-term innovation, Lerner said what’s added to the challenge in recent times is the pullback of government money which has been the backbone for the development of hard-to-monetise but societally important technologies.   

Between February and April 8 – less than 40 days – the Trump administration terminated 700 National Institutes of Health grants worth $1.8 billion, according to analysis published in medical journal JAMA. 

This is where asset owners have a critical role to play as providers of patient capital and encouraging investments in line with that philosophy, Lerner said. 

“I think in some ways it’s easy to beat up on the GPs and say, ‘look at these stupid, greedy people’, but in many cases, many of the pathologies that you see on the GP side have their reflections on the LP side,” he said. These include personnel changes leading to a re-evaluation of capital commitment, Lerner said. 

“In general, I think that there really is a mismatch between many features of the venture system and many of the really large technological challenges that are out there,” he said. 

“It’s hard to get from one equilibrium to another one, but certainly this is a challenge that we can think about.” 

Total portfolio approach (TPA) is not a method, it’s a mindset, according to University of Toronto finance Professor Redouane Elkamhi.  

Elkamhi, who is also a senior advisor to the chief investment officer and total portfolio group of Canadian pension giant HOOPP, said if he were to summarise TPA in one sentence, it would be: “How to be prepared for different market conditions.” 

A mindset of being prepared goes beyond simple scenario planning, which Elkamhi argues probably has the opposite effect, because “when there is a new scenario that comes up, you turn out to be unprepared at all”, he told the Fiduciary Investors Symposium at Harvard University. 

“[TPA] means what team you have, what tools you have, what capability you have, and what mindset you have as a CIO or a CEO, so that you can face uncertainties,” he said. 

TPA has been the focus of much investment industry literature, but it has no universally agreed upon definition. Canadian pension funds are well-known practitioners of the approach, but its adoption is also becoming more prevalent among US, European, Asian and Australia asset owners. 

The concept also has various pseudonyms. At NZ Super and Australia’s Future Fund, for example, it is known as the “[joined-up] whole-of-portfolio approach”; at CalSTRS, it is “total fund management”; at OPTrust, it is “member-driven investing strategy”; and at CPP Investments, it is “One Fund”. 

But Elkamhi said there are four common characteristics of TPA across iterations: a philosophy of fund-wide decision making; an alignment of actions with total fund objectives; the breakdown of asset class silos; and the optimisation of capital and risk allocation within and across asset classes.  

“Ask everybody, everybody will tell you we’re doing TPA these days. But look at what is the governance, what is the benchmarks, it’s going to come clearer to you guys,” he said.  

TPA’s rise in popularity is no coincidence, as Elkamhi said asset owners are fundamentally re-evaluating their assumptions about investing under which strategic asset allocation (SAA) has thrived. The first two are the interwoven factors of evolving market dynamics and changing risk premia.  

“Risk premia is changing – the idea of how much compensation you are for each risk,” he said. 

“Traditionally, you had to be compensated this way, maybe the compensation is now too high. 

“If risk premia is changing across asset classes going forward, then how am I going to build a portfolio that is based on history, to come up with some weight that are strategic and keep them forever?” 

There are also structural limitations facing funds, including liquidity constraints and liability management.  

But the final factor, which Elkamhi believes is the most influential, is investors realising there are flaws in benchmark-driven thinking.  

“I think for the last 10 years, we became scapegoat of benchmarks,” he said. For example, while asset owners realise the need for more geographical diversification compared to, say, the country composition in a global equities benchmark, their capacity to do so might be constrained due to risk budgets.  

“The reason we talked about TPA so much is because there are structural… illiquidity and flaws in benchmark, and there are now new views about asset returns,” he said. 

For any asset owners thinking of pivoting to TPA, Elkamhi recommends some deep thinking about fund structure and investment process design first.  

“Check the legacy structure. Because generally, what people do if they have an SAA [and want to be adaptive], they start to patch in it with different things,” he said.  

These organisations may want to start by establishing a good risk sandbox, re-examining their liability hedging and stakeholder alignment among a slew of other considerations.  

“TPA will change [your organisation]…it requires risk change, requires incentive change, requires you understand risk premia correctly, and requires a different mindset of being prepared,” Elkamhi said. 

“There are many smart people that will tell you SAA is good…but I believe that smart is common, courage is rare.” 

Massachusetts treasurer Deborah Goldberg said the current US political climate is “not business as usual”, adding that the state’s key strengths – including its higher education institutions and progressive social policies – are being targeted by the federal administration.  

“All that makes Massachusetts great are direct targets of the federal administration,” Goldberg said during an opening speech at the Top1000funds.com Fiduciary Investors Symposium at Harvard University’s Medical School.  

“This is not business as usual, and to be candid, this level of uncertainty and volatility is not good for anyone, both within this country and throughout the world.” 

The state was credited as the first the country to have a constitution that abolished slavery, in 1780; and as the first to legalise same-sex marriage, in 2004. Aside from Harvard University, Massachusetts also houses 113 other public and private higher education institutions, including the Massachusetts Institute of Technology (MIT). 

Just days after Goldberg’s comments, the Trump administration upped the ante on its war against Harvard, barring the Ivy League school from accepting international students on the grounds that it is permitting antisemitism and “pro-terrorist” behaviours on campus.  

Harvard has since secured a court order temporarily blocking the Trump administration’s order, but without a longer standing arrangement, close to 7000 existing international students at the university may face visa cancellation or mandatory transfer to another institution.  

Goldberg said Massachusetts’ investment in education is a key to not only maintaining its status as an innovation hub for industries like healthcare and biotechnology, but also as an attractive destination for domestic and international talents.  

“Other recent challenges, not surprisingly, are the detention and arrests of visa holders, legal residents and citizens,” Goldberg said. 

“These aren’t just assaults on the civil rights of people living here but threaten our workforce capacity. From hospitals, colleges and universities to restaurants and local businesses, our economy depends on the breadth of immigrants who come to work, study and thrive in our state.” 

Goldberg is chair of the $110 billion public employees’ pension fund, MassPRIM, and its stewardship and sustainability committee. Despite recent efforts to label sustainable investing “with politically charged buzzwords”, she said MassPRIM’s commitment to stewardship is “simply common-sense investing”. 

“[It’s] what every successful, savvy businessperson has always done,” she said.  

“We believe in all of the challenges that the committee and our breadth of investments address. We look for well-run companies.  

“We know quarter-to-quarter is not what we want to be invested in, and we understand the elements that help a company or our investments grow.” 

But as a state treasurer, Goldberg said her primary goal is to maintain Massachusetts’ AA+ credit rating – the same level as the US federal government after its recent downgrading from a triple-A credit score by multiple ratings agencies.  

She also signalled that the research innovations and start-ups in the state will need more support from investors as opposed to federal funding, “at least for now”.  

“I am actually hopeful that philanthropic dollars will help to support our colleges and universities, which are generators [for the state’s economy],” she said. 

“We have a combination of all types of things that are involved in health care delivery and all that are involved in pharma… High tech, bio tech, you name it.  

“Invest in it. Invest in it here. It’ll be well-used, and you will be very successful.”

If aging were a disease like any other that could be treated and “cured”, the implications for society would be profound, and the Top1000funds.com Fiduciary Investors Symposium at Harvard University has heard that time is not far off. 

Harvard Medical School Department of Genetics Professor David Sinclair told the symposium that aging is a medical condition like any other, that it may be preventable or treatable, and that getting older may, in the not-too-distant future, become a matter of choice. 

Sinclair said understanding how genes are turned on and off is the key to understanding the aging process and therefore how to arrest or reverse it. 

Heart attack, stroke and kidney failure and other diseases are “manifestations of this universal process I’m talking about today, that we now know occurs in every cell and in every organism on the planet, even yeast cells, that we call aging”, Sinclair said. 

Ageing affects the body’s ability to handle those diseases, but if aging is reversed they go away. 

“We know it works in what we call, affectionately, non-human primates, or monkeys,” Sinclair said.  

“Monkeys are very similar to us, of course, and so I’m on record saying I’d be really surprised if it doesn’t work in us as well.” 

Sinclair said it has long been believed that in the process of replication over a lifetime, DNA becomes damaged or mutates, and that’s what causes aging in cells. 

“There’s still a few people that hang on to this idea, but there’s a lot of evidence that that’s not true,” Sinclair said.  

“The other bit of evidence that, if you think about it, is really damning to the DNA-damage hypothesis, is I could take a cell from each of you and clone you, and I’d make babies out of your old cells. 

“It says that [in] our old cells, it’s not the DNA that’s a problem, it’s something else that has a reset button. I believe we found out what that reset button is. And fortunately, we won’t have to go through a cloning step to be rejuvenated. We can do it while we’re still alive. 

“It’s not the DNA that’s the destiny, it’s something else.” 

Sinclair said that in essence there exists a kind of “backup” of an organism’s original DNA, called the epigenome, which can be used as a reference to “reset” the organism’s DNA. The trick, Sinclair said, is not to push back the aging process too far and cause the DNA to create stem cells, because that is fatal to the organism. 

“What we had to figure out, which really was the hard part, was how do you reset aging by 75 per cent, 80 per cent, but not 100 per cent, and safely?” he said. 

“What we’ve found is a way to not just keep embryos young, but to safely keep adult tissues young.  

“We’ve done it… in living monkey tissue, and humans are next.” 

Change the pattern 

Sinclair said his lab’s goal is to “change the DNA methylation pattern on the DNA”. 

“What we’ve shown in my lab and … in the monkeys is that we can reset the pattern of those chemical changes on the DNA,” he said. 

“And if you’re astute, you might be saying, how is that possible? How does the cell know which of these chemicals is missing to put it back on and vice versa? And my answer is: that’s the Nobel Prize. If you want to win one, go figure that out. You’d be racing me for that answer. 

“We don’t fully know yet how it works, but we have some clues, and I have students on that, but we think that there’s physical changes, some tags on the DNA that gets laid down when we’re babies that tells the cell how to go back and put those chemicals back where they belong.” 

Sinclair said that if his research holds up and he’s correct about the hypotheses so far put forward, it could be as big an advance in medical science as vaccination or antibiotics. 

“It’s really big, and it will really change society,” he said, 

“It will change the way we think about our lives and what diseases we can treat that we currently have nothing for. 

Sinclair said the pace of research and discovery has been accelerated exponentially by the application of artificial intelligence, allowing his researchers to do “AI screens of trillions of molecules in a matter of two months that would normally take probably 20 years to go through physically”. 

“Out of those trillions of molecules, we have hits that are reversing aging in similar ways to the gene therapy, single molecules, not cocktails that we’ve been using.  

“Those single molecules, if they work, you could imagine, and we will try them, to take a pill to cure blindness or to cure Alzheimer’s. That’s how fast it’s going, that in two months, we can do 20 years of research now by simulating chemistry in the computer and docking trillions of molecules against proteins.” 

Sinclair said the work that’s been possible in the past few months was literally impossible only a few years ago and would have taken “more than a million years to do this, probably,” without AI. 

“What we were looking for was a single molecule that could activate one enzyme and inhibit three other different ones,” he said. 

“Normally, you’re after one target, which is extremely difficult. We said, let’s do four with one molecule, and we got it to work.  

“But you can only do that in the in the virtual world. It wouldn’t be possible physically. So AI is huge. If you ask my students, how often do you use AI, for them, it’s like breathing.”