Irrational Capital
Irrational Capital is a Philadelphia-area investment research firm that licenses the proprietary Human Capital Factor® methodology, quantifying the link between corporate culture, employee motivation, and equity performance, to ETF issuers (Harbor, BMO, CIBC), institutional investors, and corporations seeking human capital benchmarking.
- Company typePrivate
- Founded2017
- HeadquartersConshohocken, United States
- Headcount1–10
- GTM typeB2B
- OfferingSoftware
What Irrational Capital does
Irrational Capital is a privately held investment research firm founded in 2017 and headquartered in West Conshohocken, Pennsylvania (Philadelphia metropolitan area). The firm is co-founded by behavioral economist Dan Ariely (James B. Duke Professor at Duke University) and David van Adelsberg, a former financial-institution private equity head. It builds and licenses the Human Capital Factor® (HCF), a proprietary quantitative methodology that statistically links workplace culture and employee motivation to future equity performance. The HCF framework scores companies across seven dimensions — Direct Managerial Relationships, Organizational Alignment, Engagement, Innovation, Organizational Effectiveness, Emotional Connection, and Extrinsic Motivation — drawing on millions of internal employee survey responses and public data sources such as Glassdoor, with explicit penalties applied when sentiment is unevenly distributed across seniority, gender, or department.
The company's commercial surface is built around three monetization vectors: (1) index licensing to ETF issuers (Harbor Capital's HAPI/HAPS/HAPY on NYSE and BMO's ZHC on Cboe Canada, plus the CIBC Human Capital Index), enabling global retail and institutional investor access via standard brokerage rails; (2) subscription-based research and data products, including HCF Investment Ratings benchmarking against 4,000+ public companies and HCF Signal quantitative data for multi-factor managers, with six independent J.P. Morgan research notes (2021–2025) validating the methodology; and (3) bespoke strategy and portfolio screening services for asset managers, asset owners, and private equity firms. Independent third-party validation — J.P. Morgan has documented that HCF long portfolios delivered roughly 4% annualized excess returns and 'strictly dominate all styles across all metrics' in backtests — is a central pillar of the firm's value proposition and distribution. HAPI crossed $200M AUM within two weeks of launch in October 2022, earned a 5-star Morningstar rating in October 2025, and delivered a 30% return in 2023 versus the S&P 500's 26%.
The firm operates with a lean 1–10 person team (per firmographic data), supplemented by an advisory board that includes Hannah Grove (former State Street CMO) and James Walker (former J.P. Morgan Private Bank Global Head of Investments), and channels demand almost entirely through B2B institutional relationships rather than direct consumer marketing. Strategic priorities evidenced in the input data include geographic broadening (Canada via BMO ZHC in 2025, Europe via J.P. Morgan's sixth note), product diversification (HCF Signal as a standalone SKU), and channel diversification to reduce Harbor-concentrated ETF dependency. The firm has not disclosed external funding; growth to date has been bootstrapped through index licensing royalties, subscriptions, and partner-led distribution.
Irrational Capital firmographics
Firmographics- Name
- Irrational Capital
- Legal name
- Irrational Capital LLC
- Website
- https://irrational.capital
- Company type
- Private
- Founded year
- 2017
- Operating status
- Operating
- Headcount range
- 1–10 employees
- Short description
- Irrational Capital is a Philadelphia-area investment research firm that licenses the proprietary Human Capital Factor® methodology, quantifying the link between corporate culture, employee motivation, and equity performance, to ETF issuers (Harbor, BMO, CIBC), institutional investors, and corporations seeking human capital benchmarking.
- Ownership category
- akta.pro rank
Irrational Capital industry classification
Industry- Product category
- Investment Research & Quantitative Analytics
- NAICS
- Portfolio Management and Investment Advice (523940), Investment Banking and Securities Intermediation (523150)
- SIC
- Investment Advice (6282)
- akta.pro primary industry
- Large-Cap Equity (Active) (FSAAAIAA)
- akta.pro secondary industry
- People Analytics, Assessment & Psychometrics Consulting (BPAHAGAH)
Keywords
Where Irrational Capital is headquartered
LocationHeadquarters
- HQ city
- Conshohocken
- HQ country
- United States
- HQ region
- North America
Offices1 record
Markets served
Irrational Capital business model
Business model- GTM type
- B2B
- Offering type
- Software
- Cost components
- Personnel, Technology or R&D, Operations, Marketing or Sales, Others
Revenue model
- Index Licensing: Irrational Capital licenses its proprietary Human Capital Factor methodology to ETF issuers and index providers who create investment products tracking HCF indices. Revenue is generated through licensing agreements with firms like Harbor Capital Advisors (HAPI, HAPS, HAPY ETFs) and BMO Asset Management (ZHC ETF).
- Investment Ratings Reports: The company offers Human Capital Factor Investment Ratings reports to companies, benchmarking their workforce sentiment against 4,000+ public companies across the seven HCF dimensions. Reports include internal comparisons, decile performance, and recommendations tied to equity value creation. Offered to both public and private companies for investor relations and HR assessment purposes.
- Signal and Research Data: Quantitative signal data and fundamental research assessments sold to multi-factor managers and institutional investors. The company provides HCF signal data validated by J.P. Morgan's Quantitative Derivatives Strategy Group for portfolio construction and factor integration.
- Bespoke Strategy Development: Custom HCF strategies and portfolio screening tools developed for asset managers and asset owners globally. Investment managers can secure bespoke HCF strategies and apply HCF screens to existing portfolios.
Go-to-market motion1 record
Distribution channels4 records
Marketing channels10 records
Irrational Capital product offering
Product offeringCore offering
Irrational Capital develops and licenses the proprietary Human Capital Factor® (HCF) methodology, which applies workplace behavioral science, financial acumen, and data science to quantify the statistical link between employee sentiment and future equity performance. The firm monetizes HCF through three core offerings: rules-based HCF indexes licensed to ETF issuers, quantitative signal data sold to multi-factor managers, and benchmarking rating reports sold to companies for human capital assessment.
Product overview
Irrational Capital is an investment research firm offering a suite of products centered on its proprietary Human Capital Factor® (HCF) methodology. The core offering includes HCF indexes that track companies based on their human capital management practices across seven dimensions. These indexes underpin multiple ETF products (HAPI, HAPS, HAPY, ZHC) for investors seeking exposure to companies with strong corporate cultures. Additional offerings include Investment Ratings for companies to benchmark their human capital performance, Signal products for quantitative and fundamental investors, and comprehensive research validated by J.P. Morgan's Quantitative Research Team.
Differentiator
Problem solved
Functional benefit
Brands
- Human Capital Factor (HCF): A proprietary investment factor that quantifies the link between corporate culture, employee motivation, and future equity performance through seven dimensions: Direct Managerial Relationships, Organizational Alignment, Engagement, Innovation, Organizational Effectiveness, Emotional Connection, and Extrinsic Motivation.
Products and services
- Human Capital Factor® (HCF) A proprietary quantitative investment methodology that applies workplace behavioral science, financial acumen, and data science to measure the statistical link between human capital and equity performance, identifying publicly traded companies with the potential to deliver market outperformance tied to the exceptional qualities of their workforces.
- HCF Indexes A suite of rules-based indices including the Human Capital Factor Large Cap Index, Small Cap Index, and CIBC Human Capital Index that identify companies scoring highly in human capital management across the seven HCF dimensions. Recalibrated annually.
- Signal Quantitative and fundamental signal offerings for multi-factor managers, providing diversified or orthogonal signal based on the HCF methodology for portfolio construction and factor integration.
- Human Capital Factor® Investment Ratings A benchmarking service that enables companies to rate themselves against 4,000+ publicly traded companies, providing ratings and assessments across multiple HCF dimensions with comparisons by industry, size, seniority, department, and gender.
- Bespoke HCF Strategy Development Custom HCF strategies and portfolio screening tools developed for asset managers and asset owners globally, enabling investment managers to apply HCF screens to existing portfolios and develop tailored factor-based strategies.
Quantifiable outcome
- HCF long portfolio delivers ~4% annual excess returns over benchmark (J.P. Morgan, 2025)
- +6 more outcomes
Companies that use Irrational Capital
Customer profileNamed customers6 records
Segments3 records
Ideal customer profiles3 records
Irrational Capital technology and API
TechnologyTechnology focussed Yes
API detail
- Has API
- No
- API docs
- API detail
Core technology
AI maturity
App detail
Feature5 records
Irrational Capital partnerships and signals
Strategic signalPartnerships
Six partnerships are on record, tiered flagship, core and minor.
- BMO Asset ManagementflagshipBMO Asset Management launched the BMO Human Capital Factor US Equity ETF (Cboe Canada: ZHC) in June 2025, providing Canadian investors access to HCF-screened US equities. The ETF selects securities using Irrational Capital's proprietary HCF methodology across seven human capital dimensions.
- Bart HoulahancoreBart Houlahan, co-founder of B Lab (the B Corporation movement), joined Irrational Capital as a Partner. Houlahan brings deep experience in building impactful businesses and global brands, and his addition signals Irrational Capital's commitment to aligning human capital with business success.
- FactSetminorFactSet featured the Human Capital Factor in its Capital Ideas Forum roundtable with Dan Ariely and J.P. Morgan's Khuram Chaudhry, reaching FactSet's institutional investor client base through a webcast.
- Harbor Capital AdvisorscoreHarbor Capital launched three ETFs underpinned by the Human Capital Factor: HAPI (large cap, NYSE: HAPI), HAPS (small cap), and HAPY (corporate culture leaders). HAPI earned a 5-star Morningstar rating and crossed $200M AUM in two weeks. The partnership is the primary channel for delivering HCF investment exposure to retail and institutional investors through standard brokerage platforms.
- J.P. MorgancoreJ.P. Morgan's Quantitative Research Team has published six independent research reports validating the Human Capital Factor methodology (March 2021, January 2022, November 2022, August 2023, December 2024, October 2025). J.P. Morgan was named top global research firm by Institutional Investor. The research validates HCF's ability to generate alpha and its orthogonal nature relative to other factor strategies.
- CIBC World MarketsflagshipCIBC World Markets developed the CIBC Human Capital Index using the HCF methodology created by Dan Ariely and Irrational Capital. The index is a modified market capitalization weighted portfolio of US companies with strong human capital, made available to CIBC clients.
Scale indicators7 records
Recent moves6 records
Expansion highlights6 records
Irrational Capital competitors and assessment
Company assessmentDirect peers
- MSCI: Global index and analytics provider that creates rules-based equity factor indices (e.g., MSCI ESG Leaders, MSCI Quality) licensed to ETF issuers. Directly comparable to Irrational Capital as both monetize proprietary factor methodologies through index licensing to asset managers.
- S&P Dow Jones Indices: Joint venture of S&P Global and CME Group that creates and licenses indices (S&P 500, thematic, factor, and ESG indices) to ETF issuers. Direct peer in the index-licensing business; HCF's Large Cap Index competes with their thematic/factor index products for the same ETF partners.
- FTSE Russell (LSEG): Index provider owned by London Stock Exchange Group that builds rules-based equity, factor, and ESG indices licensed globally to ETF issuers and asset managers. Comparable to Irrational Capital as a direct competitor in the index-licensing business model with the same GTM approach.
Broad incumbents
- Sustainalytics (Morningstar): ESG and corporate governance research, ratings, and analytics provider owned by Morningstar. Comparable as a provider of alternative, non-financial data used by institutional investors to construct portfolios; could enter human capital as a natural extension of its ESG franchise.
- Institutional Shareholder Services (ISS): Established provider of corporate governance, ESG, and responsible investment data and ratings sold to institutional investors. Comparable as a data-and-ratings provider serving the institutional investment community with alternative data, though focused on governance/ESG rather than human capital specifically.
- Glassdoor (Indeed): Major employee review and sentiment platform owned by Recruit/Indeed. Directly relevant because Irrational Capital's HCF methodology depends in part on Glassdoor data; Glassdoor could expand into investment-relevant analytics or restrict access, making it both a data dependency and a potential competitor.
Emerging players
- Comparably: Employee review and compensation data platform. Comparable as a source of structured employee sentiment data, and is one of the alternative-data sources that factor strategies could build from; positions it as a partial competitor or data dependency.
- Culture Amp: Employee engagement and culture analytics platform that surveys workforces and benchmarks sentiment. Comparable on the input-data side (employee sentiment measurement) but serves corporate HR buyers rather than investors, making it a potential data partner or adjacent competitor.
- RepRisk: ESG and business conduct risk data provider used by institutional investors to screen portfolios. Comparable as a non-financial data vendor sold to asset managers, though its focus is on controversies and ESG risk rather than human capital performance.
- Great Place to Work: Workplace culture certification and benchmarking organization that produces the 'Best Companies to Work For' lists. Comparable as a culture-data provider and brand, though it focuses on company certification rather than equity investment signals.
Market position
Strengths5 records
Weaknesses5 records
Competitive moat5 records
Key risks5 records
Key highlights7 records
Customer concentration
Irrational Capital social profiles
Digital presenceIrrational Capital financial estimates
Financial estimateRevenue estimate
Valuation estimate
Irrational Capital leadership team
Management profileNumber of profiles
Profiles9 records
Irrational Capital funding detail
Funding detailFunding overview
Funding rounds
Investors
Funding detail is available on the Subscription and Enterprise plan.Contact sales →
Irrational Capital M&A and investment
M&A and investmentM&A
Investments
M&A and investment is available on the Subscription and Enterprise plan.Contact sales →
Frequently asked questions about Irrational Capital
What does Irrational Capital do?
Irrational Capital develops and licenses the proprietary Human Capital Factor® (HCF) methodology, which applies workplace behavioral science, financial acumen, and data science to quantify the statistical link between employee sentiment and future equity performance. The firm monetizes HCF through three core offerings: rules-based HCF indexes licensed to ETF issuers, quantitative signal data sold to multi-factor managers, and benchmarking rating reports sold to companies for human capital assessment.
Is Irrational Capital a public or private company?
Irrational Capital is a private company. It is classified as founder individual operated bootstrapped and is currently operating.
When was Irrational Capital founded?
Irrational Capital was founded in 2017. It employs 1 to 10 people.
Where is Irrational Capital based?
Irrational Capital is headquartered in Conshohocken, United States, in the North America region.
How does Irrational Capital make money?
Four revenue lines are on record. Index Licensing is the primary driver. The others are investment Ratings Reports, signal and Research Data and bespoke Strategy Development.
Who are Irrational Capital's main competitors?
Direct peers on record are MSCI, S&P Dow Jones Indices and FTSE Russell (LSEG). Broad incumbents are Sustainalytics (Morningstar), Institutional Shareholder Services (ISS) and Glassdoor (Indeed). Emerging players are Comparably, Culture Amp, RepRisk and Great Place to Work.
Does Irrational Capital have an API?
No public API is recorded for Irrational Capital.
What industry is Irrational Capital in?
Irrational Capital's product category is Investment Research & Quantitative Analytics. Its primary akta.pro industry code is FSAAAIAA, Large-Cap Equity (Active), with a secondary code of BPAHAGAH, People Analytics, Assessment & Psychometrics Consulting. Its NAICS code is 523940 and its SIC code is 6282.