Working paper · October 2026

Are Long-Term Investors ‘Underweight Long-Term’ in Public Equity?

Joshua Barach, Mark Daniel and Ashby Monk · Stanford Research Initiative on Long-Term Investing

Abstract

Pension funds, sovereign wealth funds, endowments, foundations, and family offices routinely claim patience and a long-term horizon as structural advantages. But while public equity is a meaningful allocation for all of them, it is unclear how much exposure is actually built to leverage patience and time horizon. Resolving this conundrum is the central aim of this paper. To clarify, we call an active public-equity exposure ‘long-horizon’ only when four things are true at once: the portfolio is meaningfully different from its benchmark; its return comes from the economic performance of the underlying businesses rather than from the repricing of their shares; the capital underpinning it can stay invested through stretches of relative underperformance; and it is judged based on how those businesses perform and on whether the manager held to the process they described, with relative return never decisive inside five years. On this standard, we hypothesize that most long-term investors are ‘underweight long term’ in active public equity. The cause of the public-equity short-termism of these investors, we argue, is a cascade: evaluation pressure runs from boards to chief investment officers, and from CIOs to managers. The mandates that result from this cascade depend on the market re-rating a holding within roughly three to twenty-four months. We call that time-band the middle horizon. Each link in the cascade behaves rationally given the incentives it faces. But the chain as a whole screens for mandates that show near-term validation, and managers adapt their research, portfolio construction, risk systems, communications, and hiring to the clocks that govern the capital they are given. Stated as four conditions, long-termism becomes something an investor can measure across its own book. And the claim to be a long-term investor emerges as a claim that can actually be checked.

Legal Information and Disclosures

This page summarizes a working paper by Joshua Barach, Mark Daniel and Ashby Monk, published in October 2026 by the Stanford Research Initiative on Long-Term Investing and available in full on SSRN. The views in the paper are those of its authors. Its publication does not imply any endorsement of Philip Equities by Stanford University.

Authors' Interests: Joshua Barach is Founder and Chief Investment Officer, and Mark Daniel is Chief Executive Officer and Managing Partner, of Philip Equities. Dr. Ashby Monk is Vice Chairman of Philip Equities. Joshua Barach and Mark Daniel serve on the board of the Stanford Research Initiative on Long-Term Investing.

Scope: The paper describes a category of mandate. It does not describe any fund managed by Philip Equities, and no fund managed by Philip Equities should be assumed to meet the conditions it sets out.

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