Jeremy Grantham

Jeremy Grantham – Life, Career, and Thought of a “Permabear” Investor

Jeremy Grantham (born October 6, 1938) is a British investor, co-founder and chief investment strategist of GMO LLC, and a prominent environmental philanthropist. Learn about his investment philosophy, bubble calls, climate activism, and legacy.

Introduction

Robert Jeremy Goltho Grantham, better known as Jeremy Grantham, is a British investor, thought leader, and philanthropist who has long combined financial insight with environmental concern. As co-founder and chief investment strategist of GMO LLC, Grantham is renowned for his ability to identify market bubbles and urge caution when markets stray from fundamentals. But beyond finance, he has committed much of his wealth to climate research and ecological advocacy. His voice is rare among financiers: one that warns not just of financial collapse, but of planetary risk.

This article presents a full biography of Grantham: his early life, rise in investing, investment philosophy and predictions, philanthropic efforts, personality, and the lessons we can draw from his career.

Early Life & Education

Jeremy Grantham was born on October 6, 1938, in Ware, Hertfordshire, England.
He grew up in Doncaster, in Yorkshire, raised by Quaker grandparents, which gave him early exposure to thrift, modesty, and ethics.

He studied Economics at the University of Sheffield (UK) for his undergraduate degree.
Later, in 1966, he earned an MBA from Harvard Business School.

Those academic foundations—economics and business—set the stage for his career in financial markets and macroeconomic thinking.

Investment Career & GMO

Early Steps & Founding GMO

Before founding his flagship firm, Grantham was involved in investment and economics. Some sources mention early roles as an economist (for example, for Shell) before shifting fully into investment management.

In 1969, he and partners formed Batterymarch Financial Management, an early effort in investment management.

In 1977, Grantham, along with Richard Mayo and Eijk van Otterloo, co-founded GMO LLC (Grantham, Mayo, Van Otterloo & Co.) in Boston.
GMO over time adopted a contrarian, quantitative approach, built around identifying deviations from historical norms.

GMO is headquartered in Boston and has offices globally.

Role & Influence

Grantham serves (or has served) in multiple roles at GMO:

• Chief Investment Strategist

• Board Chairman

• Core voice behind GMO’s asset allocation decisions and public commentary

• Author of GMO’s quarterly letters, where he not only reviews markets but also addresses resource limits, environmental issues, capitalism’s flaws, and climate change

GMO is known for its mean-reversion investment philosophy, i.e. the notion that asset prices, over time, tend to revert toward historical averages—a belief that underpins many of Grantham’s public warnings.

GMO has had periods of high assets under management, although that figure has fluctuated significantly over time.

Investment Philosophy & Market Predictions

Mean Reversion & Bubble Warnings

At the core of Grantham’s thinking is the idea of reversion to the mean: that extreme deviations from long-term averages are unsustainable, and markets will eventually correct.

He is often labeled a “permabear”—someone who is persistently cautious about market euphoria.

Over the decades, Grantham has made predictions or issued warnings about several market bubbles:

• He avoided Japanese equities and real estate in the late 1980s before Japan’s bubble burst.

• He warned against technology stocks during the 1990s dot-com craze, anticipating that valuations were extreme.

• Prior to the 2008 financial crisis, he cautioned about housing, credit excesses, and the broader bubble forming in global financial markets.

However, Grantham also acknowledges a key difficulty: even if it is possible to identify bubbles, predicting exactly when they will burst is far harder.

He has stated that his approach can underperform during euphoric markets (testing investor patience), but over the long term, he believes it is more defensible and stable.

Views on Energy, Resources & Carbon Bubble

Grantham sees a strong link between financial markets and ecological constraints. He has been vocal about what he refers to as the “carbon bubble”—the notion that fossil fuel valuations are inflated because they have not priced in the climate risk and regulatory shift.

He opposes projects like the Keystone Pipeline on environmental grounds, arguing that long-term harm outweighs short returns.

Grantham has also supported investments in timber (for biomass, forestry, sustainable resource use) as part of an ecological investment strategy.

He argues that the rising cost of energy over time has distorted nominal growth in recent decades.

Philanthropy & Environmental Advocacy

The Grantham Foundation

In 1997, Jeremy and his wife Hannelore (Hanne) Grantham founded the Grantham Foundation for the Protection of the Environment.
The Foundation supports climate change research, biodiversity conservation, environmental science institutes, and public awareness.

They have endowed key institutions such as:

• The Grantham Institute – Climate Change and Environment at Imperial College London

• The Grantham Research Institute on Climate Change and the Environment at the London School of Economics (LSE)

In 2011, Grantham pledged to donate 98% of his personal wealth to the Foundation and environmental causes.

The Foundation also supported the Grantham Prize (2005–2012), a journalism award recognizing environmental reporting excellence.

Climate Philanthropy & Strategy

Grantham has said that after traveling through regions like the Amazon, Galápagos, Borneo, he became convinced that climate change must be the central focus of environmental philanthropy.

He emphasizes longer, larger grants with leverage—a not just funding existing institutions, but jumping in where innovation or research is on the verge of scaling.

He also supports early-stage green enterprise, bridging the gap between academic research and commercial application.

Grantham is a signatory of The Giving Pledge, dedicating the vast majority of his wealth to philanthropic causes.

Honors, Recognition & Criticism

Honors & Awards

• He was elected a member of the American Academy of Arts & Sciences.

• In 2016, he was appointed Commander of the Order of the British Empire (CBE) for philanthropic service to climate change research.

• He and his wife received the Carnegie Medal for Philanthropy.

• He has honorary doctorates from institutions including Imperial College, The New School, and University of Sheffield.

• In 2011, Bloomberg Markets ranked him among the “50 Most Influential” in finance.

Critiques & Trade-offs

• Some critics point out that while Grantham is vocal about environmental risk, GMO (or its funds) at times maintained exposure to fossil fuels or energy companies—a tension between ideals and portfolio constraints.

• Others note that calling bubbles is easier than timing their collapse; even Grantham acknowledges the difficulty in predicting when a market reversal will occur.

• Asset under management (AUM) at GMO has seen declines during periods when contrarian strategies underperform, testing investor patience.

• Some watchdogs also highlight his contributions to organizations with political or ideological leanings, and question transparency of influence.

Personality, Voice & Public Influence

Jeremy Grantham is known for combining analytical rigor with moral urgency. He is willing to critique mainstream capitalism, short-term thinking, and systemic risks—unusual among high-profile investors.

His quarterly letters are widely read not just for financial insight, but for commentary on ecological constraints, inequality, and existential risk.

He frames environmental crisis as inseparable from economic and financial stability. He argues that ignoring resource limits and climate disruption is itself a form of mispriced risk.

Grantham’s voice is often prophetic; he is comfortable raising alarm, even at risk of being labeled alarmist. But his track record in bubble foresight gives weight to his warnings.

Notable Statements & Ideas

While he is not a quote-collector like many writers, Grantham has made several statements (especially in letters and speeches) that spotlight his worldview:

• On excess markets: “Mean reversion is the heartbreaking principle that good times always revert back to more boring, more ordinary times.” (often quoted in investor circles)

• On climate risk: “We’re trying to buy time for the world to wake up.” — capturing urgency around climate action.

• On environmental philanthropy: “Climate change is the bedrock on which all protection of nature rests.”

• On bubble calls: he has repeatedly stated that many assets, especially in energy or land, are in a speculative bubble because they fail to incorporate long-term ecological limits.

Lessons & Insights from Grantham’s Career

1. Think long term, even if unpopular. Grantham’s strategy rests on durable principles, not chasing the next fad.

2. Markets are not infallible. Excesses and bubbles occur; structural risk must be considered.

3. Integrate finance and ecology. He insists that sustainable economics is not separate from investment logic.

4. Weigh patience. Contrarian, defensive investing can lag in bullish markets—discipline is required.

5. Use wealth with purpose. Grantham channeled his success into environmental causes, showing that investors can pursue both profit and planet.

Conclusion

Jeremy Grantham occupies a rare space among financiers: ahead-of-trend investor, persistent critic of market excess, and one of the more outspoken voices on climate risk. His life weaves together technical mastery, moral perspective, and strategic philanthropy. Whether one agrees with all his forecasts, Grantham’s integration of economics and ecological realism sets a compelling model for the next generation of investors and thinkers.