RESEAR CH
to be more realistic about their expectations of returns. “It is an interesting
and worthwhile thing to do and it serves a social purpose and you might get good returns, but I don’t necessarily buy the argument that impact investing will give better returns than the rest of your portfolio,” Fruitman says. “I think that is nice
if it happens, but if you are going to venture into
it allows families to combine traditional philanthropic activities with their return- generating investment activities. Private equity (67%) and equity (39%) were
the most common asset classes for impact investing, but families also used real estate (27%), microfinance (21%), private debt (20%) and alternatives (17%) as vehicles, the GFOR reported. Education is still the most popular cause for impact investing (51%), followed by housing and community development (49%), agriculture and food (49%) and women’s empowerment (43%). However, Fred Fruitman, managing director
of Loeb Holding Corporation— the US-based Loeb family’s investment arm suggests while impact investing sounds attractive, families need
impact investing, you have to do so because you believe in what they are doing and the profit and return from it is only secondary.”
Measure what
matters While the next generation is set to increase its family office’s exposure to impact investing, families still face a number of challenges. The measurement of impact from investing is the most common issue (56%), with families often resorting to using investment performance as an indicator.
MOST COMMON AREAS OF IMPACT INVES TMENTS
Education
Housing and community development Agriculture and food Women’s empowerment Energy and resource efficiency Environmental conservation Base of pyramid services Sustainable consumer products Job creation Healthcare and wellness Sustainable infrastructure Access to finance Technology
51% 49% 49% 43% 30% 28% 25% 24% 22% 21% 15% 12% 1.6%
Source: The UBS / Campden Wealth Global Family Office Report 2018
Note: Respondents were able to select multiple options
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ISSUE 75 SUPPLEMENT | 2019
80% 70% 60% 50% 40% 30% 20% 10% 0%
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