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