Taking the initial step towards impact investing
I have the pleasure to work with family offices and their principals for over a decade in Switzerland and globally. I have been witness to the glacier pivot towards sustainable investment in this sector which is fortunately picking up pace. Perhaps due to the blatant climate warming extremities or due to widening inequalities in the economies, Family Offices are delving more in responsible, sustainable and impact investing.
How do they start their journey?
There are various models which are materializing and they fall into three categories:
Principal decides to convert the whole portfolio to ESG compliancy
Next Gen convinces the Principal to invest in impact investing
Next Gen receives a portion of the wealth to invest in impact investing
Whichever model you fall under, there is a process of seeking and questioning where the family wishes to leave their legacy? What is the purpose of the family wealth?
Generally, Family offices feel more comfortable to invest in club deals. Even more so when it comes to impact investing which may be a new topic for them. Particularly, if they do not have ample resource and large team to do a proper due diligence on each opportunity.
Several organizations have mushroomed recently to accommodate this need of gathering family offices together to learn from each others’ investment thesis, gain exposure to opportunities which have been vetted, and increase their confidence in mobilizing capital towards impact investing.
Gratitude Railroad – was established by a YPO peer, Eric Jacobsen based in the USA. They convene and educate through network events, virtual learnings with value aligned investors, UHWNF, foundations and advisors. They all contribute their expertise and resources towards collective knowledge on ecosystem building and eventually investment opportunities.
The Impact Office – established by my friend Risto Väyrynen based in Geneva, originally hailing from Finland, is a 4th generation member of a family business. He gathers Single Family Offices under his wing and coordinates workshops and gatherings in Geneva, London and also in The Impact House in Slush (the tech conference in Helsinki) to help these families move beyond talk, find their own purpose and take action.
Knowledge Impact Network – established by my dear YPO friend, Alain Chetrit, whom has also identified this void in the Family Office space and started impact circles within KIN. Impact circles provide the answer to these families which are looking to define their own purpose. Impact circles are ‘forums with a cause’ and connect the families with experts from KIN providing expert valuable coaching and knowledge which they can propel the project forward.
TONIIC – is a platform of a global community of asset owners seeking deeper positive net impact across their portfolio. They hold virtual meetings and present opportunities explaining why some of the members invested. TONIIC also has an educational component alongside the investment aspect of the group.
SMILE – more recently I have come across SMILE which was established by Francois Botha providing comprehensive solutions to Family Offices. If you are thinking of establishing a family office, SMILE has the research and advice, service providers, to reach benchmark efficiencies. They also have an impact review which includes the latest trends in impact investing.
So if you are a family office, a principal, the next generation, do not wait to educate yourself about responsible investing. Manage your wealth in extension of your values. Join one of these communities today.