“What does a fruit fly have to do with a 401(k)?” It was a snarky question meant to knock Jonathan Thomas from his footing. It didn’t work, given his easy-going and unflappable nature.
“That’s funny,” Thomas, President and CEO of American Century Investments, politely chuckled before answering. “I can say what it doesn’t. The fruit fly has a very short life cycle and doesn’t need a lot of long-range planning. Humans are quite different. We’re only financially productive for a portion of our lives and must live off our work for another part of our lives. That’s what we’re all about in the retirement space.”
The interview’s location, the Stowers Institute for Medical Research, is a world-class, Kansas City-based facility intertwined with the company Thomas leads. Its Zen atmosphere, absent the fluorescent-white medical stereotype, gave it an Ivy League feel.
Its research focuses on things like the regenerative properties of certain species and how they could one day work for humans, or how the efficient delivery of toxins from jellyfish stings could better map the delivery of medicines to specific body parts. It’s best described by the layperson as “really cool.”
American Century’s connection to the institute came from its founders, Jim and Virginia Stowers. Jim trained initially as a physician and Virginia as a nurse. Both were diagnosed with cancer in the 1990s after leading the investment company since 1958. Their experiences and medical backgrounds fueled a passion for helping others, and in 1994 they established the institute.
“Jim and Virginia did something that almost nobody does while they’re alive; they gave away almost all of their wealth,” Thomas explained. “They decided they wanted to have a tremendous impact on human health and helping people; that’s what their whole life was about.”
After traveling the world to many highly regarded scientific organizations, they saw what each was doing. Their vision–and the institute’s unique structure–began to form.
Today, it’s impacting the scientific and medical communities in a number of ways. While it competes with other organizations, its altruism means it shares its findings with the larger community–what works and, importantly, what doesn’t.
“If we have a theory, and we test it, and we’re wrong, the Stowers Institute also publishes all the negative results,” Thomas said. “It’s unique. We don’t want anyone else wasting time and resources replicating something we’ve already studied. So not only do we publish and share with the world everything we learn here, but we publish the things that did not work.”
Telling the Story
Getting American Century to discuss its Stowers’ relationship wasn’t easy, and for whatever reason, it isn’t highly publicized, which is odd, given that the firm isn’t publicity shy. Its sponsorship of the American Century Celebrity Golf Championship last summer featured every athlete and actor in existence, with Tony Romo taking the crown.
“It’s an amazing story, and I can’t believe it isn’t more well known,” Thomas conceded. “When I started 17 years ago, we had just begun to tell the story of the connectivity between American Century and the institute, and nobody wanted to hear it. I kept telling it anyway, and as I did, they’d say it didn’t make sense. In fact, they saw it as an impediment to our success.”
No longer, and today the timing couldn’t be better given the popularity of environmental, social and governance (ESG) investing strategies. The criticism ESG recently received for its ill-defined measurements and outcomes only serve to sharpen the direct relationship Stowers and American Century enjoy. In keeping with the medical theme, Thomas called it ESG on steroids, “but it’s much more than that.”
And it’s paying dividends (literally), with 40% of American Century’s profits going to the institute, resulting in over $2 billion since 2000. That amount of money naturally attracts the best and brightest, and the breakthroughs and output are a huge source of pride for employees and clients.
Fruit Fly 401(k)
Which brought us back to the original question–why pair a fruit fly research center with a 401(k) institution?
“The Stowers Institute focuses on improving lives,” Thomas noted. “Improving longevity, disease prevention or avoidance, regeneration, or fixing human ailments. At [American Century], we’re trying to extend our clients’ financial lives through long-term financial planning and solutions like Income America in providing guaranteed income for life. The thing that really matters more than anything else is the motivation and inspiration it provides for employees.
“On top of the tremendous fiduciary duty, everybody feels we have a higher calling to make the world a better place, through what we offer at American Century Investments with long-term financial planning and investing and through the dividends we direct to research.”
American Century isn’t alone in promoting the retirement marriage of health and wealth, yet, again, the direct relationship between the two organizations makes it more obvious—Stowers the health and American Century the wealth.
“It’s often a tiebreaker [with investors]. People are choosing between other firms and us. A consultant might say we’re in the finals, all the firms are good, and they’ll meet [the plan sponsor’s] objectives. And we say to them, ‘Look, more than 40% of our profits go to fund medical research,’ and that’s a tiebreaker. That sense of ownership our employees feel for this also extends to our clients.”
A Symbiotic Structure
The symbiotic relationship extends to the organizations’ structures. Thomas claims it’s not intentional but rather in keeping with research best practices no matter the discipline.
Each American Century asset class has a dedicated chief investment officer (CIO). Portfolio managers (PM) are underneath the CIO, research analysts are underneath the PM.
“They are all attached to a particular thing,” Thomas said. “It’s about generating alpha in a very specific asset class, call it value or growth or fixed income, whatever it might be.”
The Stowers Institute has the same structure, yet instead of PMs, it has principal investigators (PI), then scientists and research personnel.
Another parallel is the singular focus American Century wants of its portfolio managers and investment staff to focus exclusively on generating alpha for clients. It should be fundamental research and security selection without distractions over legal documents, trading issues or anything else.
“It’s the same thing at Stowers. The scientists are set up in a way so that all the support functions, called the core functions, are provided in a centralized fashion and run outside of the fundamental research so they can focus exclusively on their experiments.”
Measuring Success
Stowers’ hyper-focus on research, with its “go where the evidence leads” attitude, allows its scientists to focus where they like–and should make for a great working environment. Yet, with such airy and esoteric parameters how does it measure success? By extension, how does American Century know its money is put to good use?
Refurbished from an older hospital, Stowers sits on a 10-acre campus in the city’s center, providing 600 high-paying and prestigious jobs. It wrote approximately 100 papers last year with 150 different research projects occurring at any one time.
“It’s fundamental research that’s generally a very, very long way from commercialization,” Thomas acknowledged. “As a 501(c)(3), these people provide very important publications, articles and discoveries that others learn from to help make the world a better place. It’s research at a molecular level to unlock the mysteries of life. Sometimes they get so far down the path that some things are immediately and quickly translatable into medicine. Recently, they sold a discovery to Amgen who developed an osteoporosis drug that not only halted the progression of the disease but also reversed it, which is really cool.”
Jim Stowers was an exceptional businessman, and the institute complements all the kumbaya with a wholly owned, for-profit subsidiary called BioMed Valley Discoveries (BVD).
“If they are onto something and think it could lead to commercialization—and by commercialization, I mean something that could actually help people—they will pass that on to BVD. BVD will advance that through collaborations with hospitals and other labs around the world and eventually try to bring it to the public.”
It also does a tremendous amount of what he called “compassionate” use. Big pharma might ignore many of the institute’s focus areas, either because it’s early in the process or the affected population is too niche for it to be profitable.
“We will focus on something that doesn’t necessarily have to be profitable, and something big pharma won’t touch, in order to help people. We’ll then use it in compassionate care cases.”
Ultimately, it appears to be the perfect model for corporate philanthropy, with results first and positive PR (a distant) second. It’s acting locally for the good of the greater Kansas City metro area but thinking globally in the discoveries it’s making.
“What we do is unique,” Thomas concluded. “I keep calling us a universe of one. I wish there were more like us so we could attach ourselves to a category. But it’s a huge part of why I left Wall Street for Main Street, which is where we’re located. I find it very rewarding.”
In Their Own Words: The Human Impact of Stowers’ Research
We asked the Stowers’ staff for examples of how their biomedical research is specifically helping humans. They more than delivered.
Cancer
At Stowers, our foundational research identifies the genes, proteins, molecular networks and mechanisms that underlie cell growth and other cell functions often compromised in cancer.
Our researchers are looking at how disruptions in these processes are associated with many types of cancer.
Stowers scientists have identified ways to expand human umbilical cord stem cells in culture to generate therapeutic quantities for transplants to treat leukemia and other cancers.
Other research areas include investigating cancer stem cells stubbornly resistant to treatment and developing new approaches for overcoming cancer drug resistance and stimulating immunity.
Diabetes and Metabolism
Understanding metabolism and how our body converts food into energy can help us understand obesity and diseases like diabetes.
Our researchers study metabolism in novel research organisms like cavefish as a powerful way to understand the genes and mechanisms underlying metabolic processes in health and disease.
We have shown that cavefish, for example, exhibit characteristics like high body fat and blood sugar levels associated with diabetes and metabolic syndrome in humans but do not experience adverse health effects. We seek to understand why and how that knowledge can help humans.
Brain and Memory
With more than 85 billion neurons, the brain is one of the most complex systems in the world. Understanding the healthy brain can help us understand how memories form and what goes wrong in neurodegenerative diseases like Alzheimer’s.
Pioneering research on clustered proteins called amyloids, which are associated with devastating neurodegenerative diseases such as Alzheimer’s and Parkinson’s, has revealed a normal and healthy role for amyloids in the brain, specifically in long-term memory formation.
This paradigm shift challenges traditional approaches to developing potential treatments for amyloid-associated brain diseases.
Aging and Regeneration
To humans, aging may seem like a natural part of existence, but many organisms can be described as biologically immortal.
Our research has yielded findings with implications for addressing a broad scope of age-related conditions such as inflammation, hearing loss, glaucoma, and the loss of the sense of smell.
Pioneering research on molecules that control the formation and loss of bone helped lay the groundwork for a new type of osteoporosis treatment called Romosozumab.
Our research also focuses on aspects of regeneration, the ability of adult stem cells to reproduce many kinds of cells.
We study flatworms, apple snails, killifish, and zebrafish to understand better how these unusual cells and animals accomplish such feats, providing possible blueprints for activating these abilities in new contexts and other species.