Here’s a cynical strategy for active investors – buy stock in companies that buy political influence. Investing in Influence, a new paper from Sparkline Capital’s Kai Wu, notes multiple studies have found big benefits accrue to politically-connected companies.

Political spending is an investment “that creates value for years to come”, with connected firms obtaining more government contracts, bailouts, tax reductions, and regulatory relief.

It prompted Wu to devise a metric called lobbying yield. Defined as lobbying for share divided by price, it aims to capture how much political capital investors obtain for each dollar invested in the stock. Over the last 20 years, high lobbying yield stocks outperformed the market by 2.3 per cent per year with “remarkable consistency”.

He also measures the performance of companies that made greater political donations. Like lobbying, donations pay off, with a basket of generous donors beating the market by 2.2 per cent per year. Political investment tends to be “overlooked” by the market, says Wu. Investors can profit by buying “undervalued political capital”.