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thank you for joining us my name is
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Stephanie Kim and I'm the associate
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director of community strategy at the
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Wharton social impact initiative and I'm
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very excited to welcome our guest today
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lisel pritzker Simmons whorton social
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impact initiative's 2015 nazarian social
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innovator and residence the Angela and
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David nerian social innovators and
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residence program host leaders who
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leverage business-based solutions to
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solve economic and social challenges in
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communities around the globe leel is a
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co-founder and principal of Blue Haven
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initiative a family office dedicated to
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investing for-profit and nonprofit
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Capital to advance solutions to social
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environmental challenges leel thank you
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for being here thank you it's a pleasure
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so you supported wsi's impact investing
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research this year our report Great
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Expectations was released at socap last
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month and aimed to debunk the
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expectation that impact investors must
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always sacrifice Financial returns when
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seeking social returns we found no
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evidence that supports the tradeoff what
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was your reaction when you heard these
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results uh quite frankly I was not
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surprised I was very pleased to see um
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sort of the weight that Wharton can
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bring and the rigor that they can bring
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to the research but anecdotally from my
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own experience as an investor and um and
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working with other investors we have not
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actually seen that tradeoff that I keep
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sort of hearing about from um more
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traditional investers and so um I was I
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was very pleased that my sort of
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anecdotal experience
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was now um had some some some academic
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rigor behind it um cuz I think that's
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one thing that's been um a real struggle
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in the impact investing space is uh
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traditional
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investors sort of uh believe this myth
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that there needs to be a tradeoff
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sometimes there can be but if you're
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seeking commercial returns or market
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rate returns chances are you can achieve
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those and also achieve your impact goals
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as well awesome well let's talk about
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Blue Haven initiative with so many
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options for interventions and impact
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areas how did you decide upon your
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company's investment strategy and
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portfolio sure so Blue Haven initiative
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is the single family office um of me and
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my husband and um we sort of several
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years ago had a fairly traditionally
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invested um portfolio so was Diversified
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across asset classes according to a risk
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return profile that you know made sense
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for our family and our sort of capital
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preservation and growth um uh goals um
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but really didn't wasn't paying
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attention to what the social and
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environmental impact of those
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Investments were and we decided that
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that was something that we cared a lot
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about um we care about what our what our
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investments are doing in the world uh I
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don't think that uh Investments are just
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neutral I think that um where you put
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your money and how you invest it makes a
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difference and so it has an impact and
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we really wanted to make sure that
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impact was a positive one on all three
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fronts social environmental and
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financial and so starting sort of with
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that
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premise the real challenge um for us and
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for our financial advisers is can we do
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that with all of the Assets in our
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portfolio not just to sliver but
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actually with everything can we look
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across asset classes and um find
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best-in-class managers and strategies
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that meet our hurdles socially
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financially and
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environmentally um and so starting
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though with an asset allocation so again
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what makes sense for our family and then
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just finding managers that are also
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paying attention to their social and
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environmental strategies and so we
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started um we started with that approach
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and then populated the asset classes is
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uh once we found managers and strategies
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that that uh we felt proud of great so
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we have good managers that you can trust
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and you know that they're thinking along
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the same wavelength as you what about
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the target areas there's poverty there's
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hunger there's Health there's you know a
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million different solar panels there's
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cook stoves how do you pick what to
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invest in so that's a great question and
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um different investors will give you all
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different kinds of answers and and
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they're all right it all depends on what
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your approach is for us we decided to
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really start with the financial asset
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classes and be impact agnostic as to
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what the sector was that that manager
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was working in um because for us I think
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it's very difficult with the size of
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portfolio that we were dealing with to
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say we're going to solve water or we're
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going to fix women or um or to even set
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a certain geographic area it would be
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very limiting um to really try to find
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Best in Class managers um so with the
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majority of our portfolio we really said
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we're going to be
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geographically and uh sector agnostic
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and really look for diversity um across
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the financial instruments and strategies
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that they're playing with so you end up
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with you know you know Green real estate
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that has a steady yield we've got you
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know um uh private Equity Funds that you
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know obviously have a longer lockup but
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are focused on financial inclusion um
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there are some areas that are focused on
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health um a lot of uh uh project Finance
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into renewable energy projects I would
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say the environment is probably one
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theme climate change and environment
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that um we have a pretty heavy exposure
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to Across the entire
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portfolio um so with the sort of the
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majority of of of the portfolio we
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really we want the managers to pick the
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area and strategy from the impact
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standpoint so exposure to impact um
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really was more opportunistic than
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strategic however in our direct
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Investment Portfolio where we look at um
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sort of early and growth stage uh
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companies and make debt and Equity
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Investments directly into them there we
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have a very sort of focused strategy
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around Financial inclusion uh and
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renewable energy in in East Africa
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particularly so what does it mean to
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have a very focused strategy is it just
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finding a lot of different companies
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that are doing similar things are you
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taking a more systems holistic approach
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what does it look like what
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we what we've done with our direct
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investment strategy is we started sort
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of with a premise um we were very
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interested in um in East Africa as a
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geography it's growing pretty quickly
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and there's a very high penetration of
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mobile money there which allows a lot of
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really interesting technology platforms
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to be built off of that high penetration
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of not just mobile money but mobile
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phones in general um and the the fact
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that you've got a pretty large consumer
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base um that is extremely comfortable
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transacting over mobile money the
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highest penetration in the world you get
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lots of interesting companies that are
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popping up and and using that as a base
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for different kinds of financial
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services
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platforms um I personally have a
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background working in micro finance and
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so really good financial services for
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consumers that are um underserved with
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Good Financial products I have seen
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firsthand what kind of a difference that
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makes being able to have insurance
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products to cover a funeral of a loved
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one can keep a family above the poverty
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line um in a pretty significant way um
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being able to access savings accounts
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being able to access loans that are
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appropriate for your business and
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appropriate for your own cash flow needs
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um are uh make a very very big
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difference in somebody's life and so for
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me naturally I'm inclined to look at
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financial services and then the
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technology platforms that can help to
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disintermediate and lower costs for
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those consumers um that's an area I have
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deep passion around and as a financial
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investor makes a lot of sense you know
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I'm not coming into this with a deep
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background in how to develop wind
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turbines sure you know but financial
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services and products I get I understand
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um I understand those business models
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and so um as an investor it makes sense
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for me to play there and I think it's an
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area of sort of Deep Impact so East
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Africa um is good geography again with
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the mobile money um there's very high
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demand and um we we have seen a lot of
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innovation happening there right so you
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have the asset managers you have the
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different strategies that they're all
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choosing to take based on what they see
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makes sense for the asset class that
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they're managing you have a really
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focused uh F you have a strong focus on
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certain interventions that you see
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working and proven to work and that
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makes sense based on your interests and
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competencies rolling it all back up
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again to this idea of financial return
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and desired impact how do you make sure
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that happens well we do our very best um
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to measure and to monitor um and a lot
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of it is based on intentions so if we're
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invested in a certain fund manager that
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says well we would like to have this
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kind of mix of Muni bonds that are
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working and underserved communities or
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this kind of mix of corporate bonds that
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are um uh you know lending to
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corporations that have very high ESG
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standards um then did they meet those
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targets really um on the on the social
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and environmental side and then of
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course what's happening with the
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benchmarks that they're that they're um
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tracking against and so really did you
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do what you say you were going to do and
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for me as an investor did my money
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participate in what you said it would
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participate in um and you know hopefully
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the answer is yes and so we track
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against against those things and it's
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the same thing with with our with our
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companies directly as well um one of the
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wonderful things about the direct
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investing and with the companies that
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we're targeting um we look for companies
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where the impact is embedded in their
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business model so the more they scale
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the more they grow the deeper our impact
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is um and
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so we tend with those companies to be
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even less Hands-On on the impact side
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because really what those companies need
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are to be you know operationally totally
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streamlined and efficient and grow as
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sort of as quickly and as rapidly as
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they can and then you know by default
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our impact is is deeper and we're there
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though if there are if there are
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decisions that companies make to Pivot
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away from the impact we're there to try
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to help keep them on track but um so far
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we haven't found a lot of that and you
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know at Wharton we love seeing those
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types of companies where the impact is
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baked into the business model it's not a
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campaign it's not something on the side
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and you know the slogan that we've used
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many times is that business for good is
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good for business it is and actually
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with the um Great Expectations with the
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Wharton study that came out a lot of
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that was around preservation of mission
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on exit um for those companies and and
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did managers and and did underlying
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portfolio companies think that their
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mission was compromised upon exit and
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the answer is no really because if they
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were to Pivot away from from the impact
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piece their Core Business would probably
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change right and their consumers
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wouldn't want that right and so it's
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that's the thing is that really you
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really can have those things in
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alignment um and that's what I think is
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so exciting about the space and why I
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think it's it's growing as quickly as it
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is so at the end of the day we're all
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working towards a similar vision of a
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world you know without poverty without
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hunger preventable diseases Etc impact
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investing is a growing vehicle to
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address that but we're still working in
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a world with a lot of traditional
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philanthropic models traditional
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philanthropy charity how do you think
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that practice of philanthropy will
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evolve as impact investing continues to
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grow well I think that that I mean as
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you said there are there are lots of
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different kinds of tools um that that
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people have in their tool belt to try to
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attack some of these problems and impact
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investing is one of them and at Blue
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Haven so we engage in you know
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commercial rate return market rate um
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impact investing there are foundations
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that are happy to take concessionary
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returns um and that's wonderful and
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that's needed and then of course there's
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straight grant money um that you know is
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not seeking any kind of financial return
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but hoping to you know
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uh expand the environmental and social
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return of that capital and I think that
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all of these tools can play well
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together um but for me what I think is
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exciting about people looking at
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business models and um sort of financial
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tools to try to advance some of these
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social and environmental goals is it
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frees up some of that philanthropic
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Capital to do actual Grant work so
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sometimes I think that and and over the
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years particularly you look at um some
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of the development Aid models you've had
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philanthropic dollars or development
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dollars that are um being used for
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something a business would be better to
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solve um and it would be more scalable
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it would be more sustainable and also it
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would be something that people actually
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want people aren't going to buy
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something that they don't want um and so
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you've seen a lot of different kinds of
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weird products and widgets out there in
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the market Market that have been
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developed in you know some Lab in
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Cambridge Massachusetts and shipped over
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to Uganda and actually nobody really
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wants it or uses it after 6 months well
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if people actually have to buy
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something you know we try to make it as
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low cost as possible they're going to
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tell you really fast the market will
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tell you whether that is useful to them
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or not and so anyway I think that that
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using business in this way um helps to
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actually yes save that philanthropic
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money from being I think not so
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strategically dispersed and use it for
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things that only philanthropic Capital
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can be good for and I think things like
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that are you know disaster relief um
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Refugee crisis I think a lot of
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Education hate to I hate to denounce all
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of my edtech investor friends but I
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think I know I think that um a lot of
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education is still really needs to be
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Subs ized um and I mean there's a myriad
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Arts things that the market way
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undervalues um Arts music uh are I think
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are always going to need that
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philanthropic capital and hopefully it
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can impact investors can help to free up
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some of that so that it really goes
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where it needs to go what's next in the
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impact investing space What are you
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excited about what does it need I think
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what I'm really excited about is
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starting to see um more and more more um
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sort of traditional investment firms and
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larger Banks um instead of doing impact
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investing sort of out of their CSR or
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marketing departments actually it's sort
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of moving into products and services and
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they are starting to devote internal
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resources uh to their staff to try to
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get them up to speed it's not sort of
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that cute thing that's happening over in
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the corner in philanthropy y it's it's
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starting to move um into the more
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mainstream parts of the bank um I think
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a lot of that has to do with sort of
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this kind of big Millennial push for it
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um you're starting to see more mbas get
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incredibly excited about it and I think
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the banks know that and if they're going
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to recruit the best talent this
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generation really wants to see both sort
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of profit and purpose happening at the
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same time their standards are higher um
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and so uh I get I get very excited about
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seeing this sort of going
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mainstream um and I get really excited
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about um particularly with family
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offices uh not having such a bifurcated
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approach not having your investment
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vehicle over here making money and then
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you move it over here and you give it
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away um that seems very inefficient to
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me so I like having those two sides of
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the balance sheet start to come closer
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together um and that I think is really
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exciting that is exciting weel thank you
00:17:28
for for being here thank you this was
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wonderful
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[Music]
