We study the determinants of firms’ LGBTQ+ policies and their relation to general CSR policies. Common factors explain LGBTQ+ policies related to firms’ primary stakeholders and those aimed at public LGBTQ+ efforts: younger firms, those with more financial resources, more educated workforces, catering to retail customers, and located in liberal areas have more LGBTQ+-friendly policies. LGBTQ+ initiatives encounter less societal agreement than CSR initiatives. Illustrating the distinctiveness of LGBTQ+ issues in the CSR space, we find that firms’ LGBTQ+ friendliness only weakly correlates with overall CSR performance. Lastly, we show that firms’ LGBTQ+ policies respond to pressure from shareholder proposals.

We study how pension fund (out)performance is influenced by a) a pension fund’s activity, i.e., how much the pension fund deviates in its stock allocation from typical pension fund behavior, and b) whether the pension fund is patient in exploiting investment opportunities (measured by stock holding duration). We do not find that high activity or higher holding duration, separately, lead to higher risk adjusted returns on average. However, if high activity is paired with long-term holdings, the pension fund’s performance increases. Quantitatively, if an active pension fund increases its duration by one standard deviation, annual returns tend to increase by 2.3%. Our findings indicate that some pension funds are patient enough to exploit long-term investment opportunities.

We study the relationship between crowding and performance in the active mutual fund industry. Using the equity holdings overlap of 17,364 global funds, we find that funds that crowd into the same stocks underperform passive benchmark funds by 1.4% per year. The negative returns to crowding can at least in part be explained by excess demand for liquidity and the associated discount for holding liquid stocks. We show that our measure of crowding contains novel information about performance that is not reflected in other variables that describe funds’ investment environment, such as fund size and style. Our findings suggest that crowding of investment opportunities is important for understanding diminishing returns.