Giving Compass’ Take:
• Liesel Pritzker Simmons shares how family offices can take advantage of their flexibility to deploy different types of capital to build the impact investing ecosystem through support and experimentation.
• Is your family office in a position to begin impact investing ecosystem building? What initial research do you need to conduct before you dive in?
Back in 2012 my husband, Ian Simmons, and I created Blue Haven Initiative (BHI) as a single-family office with market-rate impact investing as its focus. We set out to build a portfolio that incorporated social and environmental factors into every investment decision we made. We wanted to do this not just because we thought it was the right thing to do, but also because we thought it was the smart thing to do. To us, impact investing is more informed investing.
This meant acknowledging a simple, but powerful axiom: All investments have an impact—social, environmental and financial. Using this as a guiding principle, we systematically rebuilt our investment portfolio to try to maximize our positive impact across all asset classes. Although the vast majority of our investments did seek and are seeking market-rate financial returns, we quickly realized that how we used our philanthropic assets (both grants and concessionary investments) would be crucial to our overall impact. Over the past several years, we have experimented with and refined our rationale for when it makes sense to deploy what type of capital. While still a work in progress, we believe that playing across the returns continuum expands our opportunities to have scalable impact.
Family offices like ours have a unique role to play in building the impact investing ecosystem. With an estimated $1.7 trillion of assets under management in the U.S. alone1, family offices are well positioned to help scale the impact sector and promote a sense of accountability across generations. Mobilizing that additional investment capital into impact investing is an exciting prospect, but family offices can also bring an even more important dimension to the table: flexibility.
Read the full article about building the impact investing ecosystem by Liesel Pritzker Simmons at The Economist.
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