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thank you for joining us my name is Stephanie Kim and I'm the associate director of community strategy at the
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Wharton social impact initiative and I'm very excited to welcome our guest today
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lisel pritzker Simmons whorton social impact initiative's 2015 nazarian social
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innovator and residence the Angela and David nerian social innovators and residence program host leaders who
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leverage business-based solutions to solve economic and social challenges in communities around the globe leel is a
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co-founder and principal of Blue Haven initiative a family office dedicated to investing for-profit and nonprofit
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Capital to advance solutions to social environmental challenges leel thank you for being here thank you it's a pleasure
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so you supported wsi's impact investing research this year our report Great Expectations was released at socap last
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month and aimed to debunk the expectation that impact investors must always sacrifice Financial returns when
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seeking social returns we found no evidence that supports the tradeoff what was your reaction when you heard these
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results uh quite frankly I was not surprised I was very pleased to see um sort of the weight that Wharton can
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bring and the rigor that they can bring to the research but anecdotally from my own experience as an investor and um and
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working with other investors we have not actually seen that tradeoff that I keep
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sort of hearing about from um more traditional investers and so um I was I was very pleased that my sort of
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anecdotal experience was now um had some some some academic rigor behind it um cuz I think that's
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one thing that's been um a real struggle in the impact investing space is uh
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traditional investors sort of uh believe this myth that there needs to be a tradeoff
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sometimes there can be but if you're seeking commercial returns or market rate returns chances are you can achieve
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those and also achieve your impact goals as well awesome well let's talk about
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Blue Haven initiative with so many options for interventions and impact areas how did you decide upon your
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company's investment strategy and portfolio sure so Blue Haven initiative is the single family office um of me and
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my husband and um we sort of several years ago had a fairly traditionally invested um portfolio so was Diversified
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across asset classes according to a risk return profile that you know made sense
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for our family and our sort of capital preservation and growth um uh goals um but really didn't wasn't paying
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attention to what the social and environmental impact of those Investments were and we decided that
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that was something that we cared a lot about um we care about what our what our investments are doing in the world uh I
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don't think that uh Investments are just neutral I think that um where you put
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your money and how you invest it makes a difference and so it has an impact and we really wanted to make sure that
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impact was a positive one on all three fronts social environmental and financial and so starting sort of with
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that premise the real challenge um for us and for our financial advisers is can we do
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that with all of the Assets in our portfolio not just to sliver but actually with everything can we look
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across asset classes and um find best-in-class managers and strategies that meet our hurdles socially
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financially and environmentally um and so starting though with an asset allocation so again
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what makes sense for our family and then just finding managers that are also paying attention to their social and
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environmental strategies and so we started um we started with that approach and then populated the asset classes is
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uh once we found managers and strategies that that uh we felt proud of great so we have good managers that you can trust
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and you know that they're thinking along the same wavelength as you what about
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the target areas there's poverty there's hunger there's Health there's you know a
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million different solar panels there's cook stoves how do you pick what to invest in so that's a great question and
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um different investors will give you all different kinds of answers and and they're all right it all depends on what
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your approach is for us we decided to really start with the financial asset classes and be impact agnostic as to
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what the sector was that that manager was working in um because for us I think it's very difficult with the size of
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portfolio that we were dealing with to say we're going to solve water or we're
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going to fix women or um or to even set a certain geographic area it would be very limiting um to really try to find
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Best in Class managers um so with the majority of our portfolio we really said we're going to be
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geographically and uh sector agnostic and really look for diversity um across the financial instruments and strategies
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that they're playing with so you end up with you know you know Green real estate
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that has a steady yield we've got you know um uh private Equity Funds that you
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know obviously have a longer lockup but are focused on financial inclusion um there are some areas that are focused on
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health um a lot of uh uh project Finance into renewable energy projects I would say the environment is probably one
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theme climate change and environment that um we have a pretty heavy exposure to Across the entire
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portfolio um so with the sort of the majority of of of the portfolio we really we want the managers to pick the
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area and strategy from the impact standpoint so exposure to impact um really was more opportunistic than
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strategic however in our direct Investment Portfolio where we look at um sort of early and growth stage uh
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companies and make debt and Equity Investments directly into them there we have a very sort of focused strategy
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around Financial inclusion uh and renewable energy in in East Africa particularly so what does it mean to
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have a very focused strategy is it just finding a lot of different companies that are doing similar things are you
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taking a more systems holistic approach what does it look like what we what we've done with our direct
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investment strategy is we started sort of with a premise um we were very interested in um in East Africa as a
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geography it's growing pretty quickly and there's a very high penetration of
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mobile money there which allows a lot of really interesting technology platforms
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to be built off of that high penetration of not just mobile money but mobile phones in general um and the the fact
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that you've got a pretty large consumer base um that is extremely comfortable
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transacting over mobile money the highest penetration in the world you get lots of interesting companies that are
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popping up and and using that as a base for different kinds of financial services
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platforms um I personally have a background working in micro finance and so really good financial services for
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consumers that are um underserved with Good Financial products I have seen firsthand what kind of a difference that
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makes being able to have insurance products to cover a funeral of a loved one can keep a family above the poverty
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line um in a pretty significant way um being able to access savings accounts being able to access loans that are
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appropriate for your business and appropriate for your own cash flow needs um are uh make a very very big
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difference in somebody's life and so for me naturally I'm inclined to look at
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financial services and then the technology platforms that can help to disintermediate and lower costs for
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those consumers um that's an area I have deep passion around and as a financial
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investor makes a lot of sense you know I'm not coming into this with a deep background in how to develop wind
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turbines sure you know but financial services and products I get I understand um I understand those business models
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and so um as an investor it makes sense for me to play there and I think it's an
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area of sort of Deep Impact so East Africa um is good geography again with the mobile money um there's very high
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demand and um we we have seen a lot of innovation happening there right so you have the asset managers you have the
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different strategies that they're all choosing to take based on what they see
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makes sense for the asset class that they're managing you have a really focused uh F you have a strong focus on
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certain interventions that you see working and proven to work and that makes sense based on your interests and
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competencies rolling it all back up again to this idea of financial return and desired impact how do you make sure
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that happens well we do our very best um to measure and to monitor um and a lot of it is based on intentions so if we're
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invested in a certain fund manager that says well we would like to have this kind of mix of Muni bonds that are
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working and underserved communities or this kind of mix of corporate bonds that are um uh you know lending to
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corporations that have very high ESG standards um then did they meet those targets really um on the on the social
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and environmental side and then of course what's happening with the benchmarks that they're that they're um
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tracking against and so really did you do what you say you were going to do and for me as an investor did my money
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participate in what you said it would participate in um and you know hopefully the answer is yes and so we track
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against against those things and it's the same thing with with our with our companies directly as well um one of the
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wonderful things about the direct investing and with the companies that we're targeting um we look for companies
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where the impact is embedded in their business model so the more they scale the more they grow the deeper our impact
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is um and so we tend with those companies to be even less Hands-On on the impact side
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because really what those companies need are to be you know operationally totally
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streamlined and efficient and grow as sort of as quickly and as rapidly as they can and then you know by default
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our impact is is deeper and we're there though if there are if there are decisions that companies make to Pivot
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away from the impact we're there to try to help keep them on track but um so far
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we haven't found a lot of that and you know at Wharton we love seeing those types of companies where the impact is
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baked into the business model it's not a campaign it's not something on the side
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and you know the slogan that we've used many times is that business for good is
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good for business it is and actually with the um Great Expectations with the Wharton study that came out a lot of
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that was around preservation of mission on exit um for those companies and and did managers and and did underlying
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portfolio companies think that their mission was compromised upon exit and the answer is no really because if they
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were to Pivot away from from the impact piece their Core Business would probably
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change right and their consumers wouldn't want that right and so it's that's the thing is that really you
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really can have those things in alignment um and that's what I think is so exciting about the space and why I
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think it's it's growing as quickly as it is so at the end of the day we're all
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working towards a similar vision of a world you know without poverty without hunger preventable diseases Etc impact
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investing is a growing vehicle to address that but we're still working in a world with a lot of traditional
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philanthropic models traditional philanthropy charity how do you think that practice of philanthropy will
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evolve as impact investing continues to grow well I think that that I mean as you said there are there are lots of
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different kinds of tools um that that people have in their tool belt to try to attack some of these problems and impact
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investing is one of them and at Blue Haven so we engage in you know commercial rate return market rate um
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impact investing there are foundations that are happy to take concessionary returns um and that's wonderful and
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that's needed and then of course there's straight grant money um that you know is
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not seeking any kind of financial return but hoping to you know uh expand the environmental and social
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return of that capital and I think that all of these tools can play well together um but for me what I think is
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exciting about people looking at business models and um sort of financial tools to try to advance some of these
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social and environmental goals is it frees up some of that philanthropic Capital to do actual Grant work so
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sometimes I think that and and over the years particularly you look at um some of the development Aid models you've had
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philanthropic dollars or development dollars that are um being used for something a business would be better to
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solve um and it would be more scalable it would be more sustainable and also it would be something that people actually
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want people aren't going to buy something that they don't want um and so
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you've seen a lot of different kinds of weird products and widgets out there in
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the market Market that have been developed in you know some Lab in Cambridge Massachusetts and shipped over
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to Uganda and actually nobody really wants it or uses it after 6 months well if people actually have to buy
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something you know we try to make it as low cost as possible they're going to
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tell you really fast the market will tell you whether that is useful to them or not and so anyway I think that that
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using business in this way um helps to actually yes save that philanthropic money from being I think not so
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strategically dispersed and use it for things that only philanthropic Capital can be good for and I think things like
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that are you know disaster relief um Refugee crisis I think a lot of Education hate to I hate to denounce all
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of my edtech investor friends but I think I know I think that um a lot of education is still really needs to be
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Subs ized um and I mean there's a myriad Arts things that the market way undervalues um Arts music uh are I think
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are always going to need that philanthropic capital and hopefully it can impact investors can help to free up
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some of that so that it really goes where it needs to go what's next in the impact investing space What are you
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excited about what does it need I think what I'm really excited about is starting to see um more and more more um
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sort of traditional investment firms and larger Banks um instead of doing impact
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investing sort of out of their CSR or marketing departments actually it's sort
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of moving into products and services and they are starting to devote internal resources uh to their staff to try to
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get them up to speed it's not sort of that cute thing that's happening over in
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the corner in philanthropy y it's it's starting to move um into the more
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mainstream parts of the bank um I think a lot of that has to do with sort of this kind of big Millennial push for it
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um you're starting to see more mbas get incredibly excited about it and I think
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the banks know that and if they're going to recruit the best talent this generation really wants to see both sort
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of profit and purpose happening at the same time their standards are higher um and so uh I get I get very excited about
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seeing this sort of going mainstream um and I get really excited about um particularly with family
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offices uh not having such a bifurcated approach not having your investment vehicle over here making money and then
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you move it over here and you give it away um that seems very inefficient to me so I like having those two sides of
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the balance sheet start to come closer together um and that I think is really exciting that is exciting weel thank you
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for for being here thank you this was wonderful [Music]