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hi I'm Cheryl coolin managing director
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of the wardens social impact initiative
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and i'm here today with Julia Valentina
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Jackie who's here to talk about her new
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book catalyzing wealth for change a
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guide for impact investing welcome to
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you Leah Thank You Cheryl it's good to
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have you here so before we talk a little
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bit about the book in its contents tell
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me about your background what what what
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you know catalyzed your interest in this
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kind of work i started in traditional
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companies in traditional investing about
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23 years ago started with mackynzie but
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shifted to financial services prejudice
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soon working with abb financial services
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and then arg by 2001 i was managing the
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direct private equity business of AIG
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and it was then in 2003 when I got to
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know the type of an investment approach
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that targeted a dual set of returns
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which is language interested in the
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earlier thing exactly financial returns
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and social returns at that time it
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wasn't cold impact investing but it's
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really very fast attracting my attention
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because at that time i was searching for
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something which would be a purposeful
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korean no just if traditionally
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successful korea and then i started an
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impact investment fund with neig manage
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it for five years and then moved on to
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start an independent advisory and worked
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with a broad range of
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ultra-high-net-worth families around the
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world and advised financial institutions
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international banks within UK
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government's on setting and implementing
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impact investment strategies so you have
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a great background in the finance area
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then you've and you've sort of been part
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of the the development of this field
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seen it as its come along how has that
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affected the content that you've done in
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your book I think it was it has greatly
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impacted they contend what I have seen
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in the field is that the interest
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towards impact investing is very very
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strong and it continues to grow
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particularly among the high net worth
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individuals wealthy families asset
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owners and are you also seeing the same
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kind of interest we're seeing among
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Millennials and and the the younger
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generations in that for younger
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generations for Millennials is kind of
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absolutely normal it's a new normal for
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them they talk about impact as something
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which is firmly part of their lives but
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the interest to impact investing is not
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only limited to Millennials we see a lot
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of wealth holders both from
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entrepreneurial backgrounds and
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inheritors who had drawn more and more
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towards this innovative approach which
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uses the market forces the innovative
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entrepreneurial solutions to tackle very
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very serious social environmental
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challenges and the interest is there
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because people understand that we need
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private capital government capital and
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philanthropy is no longer enough and
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there is an excitement to go beyond
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ground-based philanthropy where it can
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complement the grounds by working with
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new actors of social change which are
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the businesses and enterprises that
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pursue societal objectives and financial
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objectives well and that sounds just as
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as inspiring as we've seen from the
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students etc but how do you move from
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that inspiration to action right because
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that's the hard part it's absolutely the
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hard part and this is the reason for the
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book a lot of research has been done
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which shows that wealth holders
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absolutely adore this theme and
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wholeheartedly want to invest their
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capital with values with impact the
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problem is that acting on this intention
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to generate impact with their
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investments has been very difficult it
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is much more complex area families need
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to really find out what is the kind of
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impact they want to have what kind of
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themes they want to tackle what is the
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rate of return that is appropriate is it
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too high to low they didn't get a lot of
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help with the advisors and as a result
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there is a huge gap between intention to
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do impact investing and the actual
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action action and successful involvement
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in the field so that's the reason for
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the guy so how does your book your guy
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your toolkit differentiate itself from
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some other research and books that are
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out there there's a lot of great pieces
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of work out and they're very
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inspirational and the things which
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differentiate this guide is that it is
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really focused on triggering action and
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not just providing inspiration when I
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read the research and I get inspired I
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say I want to know how yes I want to do
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it but how do I do it a lot of investors
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are at the stage where they convinced
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intellectually but they don't know how
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to start and whom to trust so this guide
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is set in a way that will help those who
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already convince that they want to try
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to be meaningfully involved it provides
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a lot of peer examples and case studies
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45 of them which were selected from 167
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in depth face-to-face interviews with
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families around the world it has
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practice step-by-step guidance in all
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the stages of involvement in impact
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investing from understanding what it is
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understanding how peers have used this
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approach be the foundation a family
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business an egg's Jenner and then
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developing a strategy getting your
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family on board with it and then
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actually started doing investing so it's
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really hands-on approach peer learning
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and adapted style no jargon no financial
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language so which will help people with
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different levels of financial
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sophistication and experience in
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investing to get the benefit of it and
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start doing it so what are the things
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here so you're talking about the people
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using this right now being the the
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wealth holders themselves trying to
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understand how they might approach this
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what probable do advisors play in in
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this kind of decisions one of the
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learnings actually from oldest
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interviews is that advisors play an
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absolutely critical role in this area
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and like philanthropy which a lot of
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families like to do by themselves many
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families want to work with their
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traditional financial advisers in
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helping them align their wealth with
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their values because it is complex field
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it
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quires a financial experience some fat
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wealth holders don't have this
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experience the others just don't have
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time because they're involved in their
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family businesses that don't have time
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to really get entangled into the
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nitty-gritty of the actual investment
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and also they want to work with credible
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advisors who can influence the
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patriarchs and matriarchs of the
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businesses and get the buy-in from there
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may be older generation on those who
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already have credibility within the
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family make family harmony happen with
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that and so what do you think the
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resistance on the part of advisors might
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be if I was an advisor this isn't an
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easy thing for me to move into sometimes
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right so what kind of advice do you give
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to the advisors to advise us I would say
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that it is a tremendous opportunity for
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advisors to step up and help their
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clients holistically integrate this into
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their portfolios in different approaches
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in different ways there are a lot of
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things which makes it naturally bit
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difficult for advisors and there are
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some sort of wood what I called myths
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that they have in their prejudices that
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they haven't they had that prevents
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engagement first it's a complex field
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they need to get to grips of what it is
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very often advisors thing that impact
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investing is equivalent to another way
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another type of philanthropy where you
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would need to sacrifice return so it
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actually even lose the capital they also
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think that they need to have the full
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range of products to offer their clients
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to be credible and be mission align
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themselves which is not necessarily true
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what clients want is they want advises
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being a partner and open up this topic
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discuss what's as possible have air
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understanding on their part that there's
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a desire to generate impact and make a
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difference with that capital so tell us
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that what are the things we see here the
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university is you know strongly
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increasing interest in this we are
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working to Train we think of this next
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generation of investors and advisors
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what kind of advice do you give to would
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you give to a recent graduate who looks
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at this and says well I'm not yet an
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advisor I'm not you know not part of the
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family wealth generation but I'd love to
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get involved with this what what are
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your suggestions around that I think we
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all are investors at a certain level and
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there are products currently in the
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market where you can invest as little as
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five hundred dollars in for example in
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culvert community nodes there are
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products which are available for retail
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investors and trying to put yourself in
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the shoes of the investor with as little
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capital you prepared to do is actually
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good there are also investment clubs
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where you can invest in social
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enterprises with little amount of money
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so that's one side and other side is
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that i would encourage students to think
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broader about impact investing impact
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investing is not only directly placing
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capital within impact generating
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enterprises but it's also thinking of
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yourself as a catalyst within their
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organization you you work already in
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creating this dual objective strategies
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for example businesses and corporations
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can play an important role in impact
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investing not only by investing in
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social enterprises but creating
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strategies within the corporation which
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generate commercial return and find an
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end social impact for example by
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creating an inclusive supply chain or
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developing the products and services for
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the disadvantaged populations innovating
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with their supply chain innovating with
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their products innovating with the
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delivery models and all this can be done
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within the conventional businesses the
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same with pension funds institutional
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investors being an agent of change
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wherever you are consulting companies
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provider of services because impact
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investing at the end it has a larger
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ecosystem and a lot of services I needed
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to support this market not only
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investing directly yeah and I think that
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one of the things that that your
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discussion points to is
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bad this area will be strengthened as we
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continue to see it part of something
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that everybody does that it's something
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that corporations can start looking at
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pension funds entrepreneurs investors
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philanthropists that it's part of
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creating this this larger ecosystem that
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balances and looks at profits as well as
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purpose absolutely I think that's you
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phrase it very well I think what we see
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in the world is a convergence businesses
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become closer to charities they
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incorporate impact dimension and their
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operations charities become closer to
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businesses they start full profit social
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enterprise arms they need to generate
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revenues they want to embrace
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market-based solutions so in this
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converging world you can find your place
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in a large number of institutions well
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and a question then about accountability
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and transparency you know when you're
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talking about businesses integrating a
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social impact aspect we think it's now
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very different than the traditional
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corporate social responsibility or the
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the kind of marketing and philanthropy
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that corporations do it's more
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successful when it's integrated into the
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business itself and not seen as it as an
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add-on how do you are you seeing trends
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in this as well as the impact investing
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do you think more corporations are
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learning how to be authentically and
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transparently involved in social impact
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I think so because I think there is a
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larger appreciation and awareness among
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this among the CEOs and among the
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corporations that the social
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environmental challenges we are facing
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provide the risks and opportunities
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which all of us will have to bear the
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consequences so it is important that
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private capital steps up and develop
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strategies which tackle those challenges
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while simultaneously providing the
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business value this is the shared value
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approach of Michael Porter I really love
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this because it's over embrace it and
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it's really inclusive where you would
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say this is the way to go because
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corporate social responsibility it's
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always going to be a little
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little pockets which will not be may be
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taken seriously yes but will not be as
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impactful as a holistic strategy which
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generates profitability at the same time
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as tackling the social and environmental
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challenges yes one of the things that we
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see is that a lot of times when we're
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looking at a corporation we see where
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the corporate social impact aspect lies
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if it's just under the marketing
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department or if it's just under
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community affairs it's often has less
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influence in the business than if it's
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in one of the the profit centers
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absolutely and I think now corporations
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and particularly family-owned businesses
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see that the creation of those shared
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value businesses or shared value
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initiatives it becomes an imperative to
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attracting talent and assuring the
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succession from the family members
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because the next generous they want to
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see their family business and engine of
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social change of positive one they know
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they want to know how the money is made
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not only what you do with the money
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later on but they want to align the way
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how their family business works with
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their values with the values of the
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family so I think there is a huge
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opportunity there so in Julia what kind
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of trends do you see among the weather
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wealth holders as you're doing your
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research and thinking about these issues
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and I think there is a couple that I can
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think of first of all that impact
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investing is really a tool which can be
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used to generate impact to safeguard
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wealth and manage it well but also to
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tackle a number of personal and
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strategic objectives that the family
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phase many families get excited about
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impact investing because they see that
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it could be a glue that keeps the
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generations of family members together
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particularly after the sale of the
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family business for example it could be
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a tool to educate next generation about
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responsible wealth management and assure
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that they can find a protective place in
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the society it can also be a
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way of transferring wealth with values
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and preserving the culture of the family
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and the longevity of the family business
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it's also an important thing but also
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families more and more thing that impact
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investing is in many cases and more
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effective way of giving back than
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traditional grounds which they sometimes
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get a bit worried that maybe the
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long-lasting tangible and scalable
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impact is not necessarily happening and
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they are very much excited about
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market-based solutions and supporting
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those models which can provide not just
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alleviate suffering but really have a
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systemic change so i think this
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awareness and this focus on systemic
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change is really well sin and then
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another trend that I see is trend
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towards integration where you would see
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that impact investing in the earlier
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stages of involvement of families used
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to be more like a carve-out we will do
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it with part of the assets but nowadays
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a lot of families are thinking that we
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want to have impact to be one dimension
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through which or a prism through which
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you will look at all the financial
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decisions that they will make and
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therefore they will integrate different
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types of approaches responsible
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investing sustainable investing and
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impact investing in order to achieve a
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holistic larger impact with their wealth
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thank you we've been delighted have
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Julia Balan Dina Jackie a author of
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catalyzing wealth for change in our
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studio with us today thank you
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you
