Oliver Stone’s 1987 movie ‘Wall Street,’ may have inspired a whole generation of people to join Wall Street but it also denoted the low-water mark of 1980’s capitalism when anything really did seem to go.
We are fortunate that a new segment of investment has sprung up focused on making a positive impact in the world which stands at odds with the 1980’s zeitgeist. Instead of Gordon Gekko’s ‘anything goes’ in the drive to make money, a new set of characteristics are emerging which define this particular group of successful investors or FLIs (Future Looking Investors). We have seen these traits underpin the rapid growth of the impact investment sector and become a driving force for many investors.
1. Courage
Underpinning many Family Offices’ decisions to focus on impact investing is courage. It takes a great deal of bravery to take the path less trodden, particularly when it flies in the face of the opinions of many investors. For many Family Office Principals, choosing to focus their portfolios on impact also requires them to persuade older generations and that may require its own kind of courage, particularly in Asian societies where deference to elders is deeply ingrained.
2. Collaborative
As our managing partner, Katy Yung, recently told a group of Family Offices, being collaborative is not usually associated with financial services, but is critical in impact investing. "Since we opened our doors in 2019, we have witnessed investors around the world - from Family Offices to investment banks - work in highly co-operative ways, sharing their approaches and working transparently together."
This level of collaboration reached new heights at our Asian Family Impact Summit earlier this year. Participants underlined their willingness to open up their due diligence work to other investors, recognising the benefits of increasing the flow of money towards projects and enterprises which sought the greater good.
3. Humility
This is another word that those outside of the financial services sector might not associate with financiers, but it is a hallmark of the impact investment sector. It is an essential quality in a sector where circumstances and information change daily in what is already a highly complex investment environment. Recognising that no one person has all of the information, and seeking outside expertise is not an easy step but critical in better understanding challenges and identifying potential solutions.
4. Perseverance
In our ever-changing landscape, not all investments work out and that makes perseverance an important attribute. It underpins a willingness to find new ways to solve the problems facing the world, even if the first attempts do not always go to plan.
5. Creativity
Builders Vision, a US-based Family Office, recently talked to our members about some of its more unusual sustainable finance investments. One memorable example is a company seeding molluscs – oysters, clams, and mussels – along the Pacific Northwest coast of America. What was once a thriving area for cultivation is experiencing regular die-off as sea temperatures rise. This investment shows the creativity needed to solve numerous problems simultaneously, in this case helping maintain farmers’ livelihoods whilst retaining the delicate balance of a coastal area and its unique biodiversity.
6. Persistence
The final characteristic which underlines impact investors is persistence, particularly at a time when we’re faced with the likes of which we have rarely faced before. In these times, it would be easy – and understandable – for impact investors to refocus their portfolios towards safer options, but staying true to the bigger picture is critical if we are to generate the trillions of dollars needed to solve the world’s biggest challenges and protect what we have for generations to come.
If Gordon Gekko marked the low point of capitalism, we have seen the rise of a new breed of investor – one driven by a passion to affect the world around them positively while also turning a profit. FLIs are rewriting the script to tell the world that impact, rather than greed, is good.
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