As Large Banks enter the Sustainable Arena — An Apple a Day Keeps the Doctor Away

Impact Investment Platform

To generate awareness of a new and growing investment sector, often referred to or sometimes called “Impact Investing” — readers need to understand the concept of creating returns beyond financial.  Further, what should be important to everyone is that large Financial Houses are sponsoring and holding many conferences, even internally at places like JPMorgan Chase and Bank of America, as well as at other large banks like Credit Suisse and Deutsche Bank.  I am pleased that this area is slowly becoming important on an institutional level –and is starting with newly created departments called Corporate Social Responsibility or CSR.

To create returns, investment returns by applying the core skill-sets derived from professionals at those large banks and combining that with a positive impact by core principals derived from inspiring leaders together is critical.

Recently, I was speaking with a friend who runs his own FAMILY OFFICE about impact investments, and…

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Sustainability — the missing the component!

I recently attended a Sovereign Wealth Conference hosted by KL Gates (law firm) and co-sponsored by The Fletcher School (Tufts University) in Washington, D.C. on October 10th, 2013.  The gathering was rather highly attended given an 8am start time and heavy rain that morning.  The main topic was actually the global infrastructure demand needs and the competition for capital.

Basically, the gathering attendees were the usual mix of capital providers, service providers and academia.  In addition, there were also several government related agencies/strategic bodies in attendance.

Global infrastructure projects want to attract sovereign capital investment.  A missing component to the discussion was the topic of “sustainability” as defined both in economic returns as well as impact returns.  There was one presentation that discussed the need for sustainable private equity investment, (SPE Capital Management), however, sustainability and impact was not woven into the fabric of the overall discussion that day. The focus was mainly infrastructure capital needs on a stand-alone basis.

According to sources published by THE WORLD BANK, global infrastructure capital demand needs total $60-70 Trillion with “T” of capital required for global projects.  As a result, the question becomes “Who can possibly fund this amount of capital?”  In 2012 global GDP was only $71 Trillion.  Therefore, allocation of capital and the sources and uses of capital is critical.              http://databank.worldbank.org/data/download/GDP.pdf.

In many developing nations, the need for basic infrastructure comes with high risks.  Risks take the form of time and return.  Generally, these infrastructure projects require as much as 30 to 40 years to build out and to repay investors, e.g., toll roads, bridges, tunnels, hospitals.

Therefore, “How do capital managers and capital providers satisfy this capital requirement?”

GCH Partners has analyzed this economic deficiency, and has answered it with the keyword “sustainability” as defined as “impact investment opportunities.”   Substantial investment capital is attracted by market based returns — while positively contributing to the community, the region, the nation, and the economy at large is the added benefit.

However, it is important here to take into consideration that there is a way of integrating the for-profit skill-sets while keeping the integrity and the mission of the not-for-profit business model in tact.  Sustainability offers a solution.

While keeping social consciousness in mind, we share the opportunity for institutional capital to participate in bettering the world and creating market based investment returns — a win-win situation for all parties.

In conclusion, idea generation, creativity, social consciousness and an ability to invest in projects that will make the world a better place and again, generate market based returns.  This is a solution and an answer to the overall economic GDP growth concerns and the health of the world.

 
Gregory Mark Hill
Washington, D.C.
October 10, 2013

New York hosts another Impact Conference thanks to Credit Suisse!

On June 27, 2013, I returned back to my alma mater, Credit Suisse, who hosted an impact conference at their headquarters on Park Avenue.  The definition of impact can easily get you 100 different answers from 100 different people — especially the responses that come from the for-profit vs. the not-for-profit sectors.   A simple definition of impact investment is to create returns beyond financial.  The time is now to get involved and get educated.

The main presenter at this event was a group called the All World Network (http://www.allworldlive.com).  They track the 500 top performers in emerging regions such as Africa, Arabia, EurAsia and Asia.  Two founding women partners spoke about their mission to create awareness of the top 500 in those regions of the world.  Their collective past experience includes analyzing fast growing companies in the US.  This led to the development of the magazine called the INC. 500, now the INC. 5000.

That evening, the founders shared with us how in 1985 a small fast growing software company was discovered — called Microsoft.  At the time, Microsoft was ranked #163 in that magazine.  These founders want to replicate the “Microsoft discovery” possibility many times over in those emerging markets.

Entrepreneurs were invited to this conference from those regions.  They are developing businesses for their local markets and seek American capital for investment.  I had a chance to listen to about 10 portfolio companies led by “social and for-profit oriented” entrepreneurs.  Some  of the business plans ranged from a Middle Eastern woman’s social networking site to Pakistani woman’s publishing entity to former doctors having founded a medical instruments business.  The entrepreneurs that night were seeking capital from $500,000 to $100 million.

In New York, we operate in the world of money and capital markets. New York is the “headquarters” for global capital an offers a bridge to those hungry for capital. The entrepreneurs were exposed to capital investors here in New York that evening.  As more entrepreneurs come from abroad (particularly social entrepreneurs that come to the US) — there will be an increasing need of assistance to help these entrepreneurs refine what is often called an “Elevator Pitch!”  This presents advisory opportunities for Credit Suisse and for boutique firms as well.  (I will speak more about “The Elevator Pitch” in my next article.)  But simply, an elevator pitch means — can you explain the value of your company and also be interesting to an investor during the length of an elevator ride?  

In short, these types of conferences hosted by Credit Suisse are critical to getting the word out to a growing audience of interested parties. This should attract an audience to include wealth managers, funds, intermediaries, philanthropic organizations, and entrepreneurs, but also should reach out to include schools and the student community, i.e., the important up and coming young consumer generation.  

My message to the global impact community and to the large pools of capital is to attend as many of these conferences as possible. This is a format to learn how to start and have quality conversations on how to work together with businesses thinking about impact, and how to create best practices in the process. These are not easy conversations – as the terminology used by capital providers to financial service advisers and to those in the impact and the foundation world are very different.

More than 12 years ago, I started connecting  these various groups with each other.  I realized immediately that there was a need to assist philanthropic organizations, asset managers, banks, legal firms, accounting companies, and endowment plans on how to speak with each other.  I found that I had literally become a bridge to connect the disconnects in communication among these groups (even though we were all speaking English) as there was lots of industry jargon used by both sides.  For example, I remember one meeting hosted at a prestigious law firm with its lawyers and a philanthropic group in attendance. I was able to quickly turn “a long story” of an agriculture project with workers and staff in desperate need of money in a developing country into “IPO speak.”  I turned the project into the Firm’s prospective client, and made easy references to underwriters, syndicate groups, and access to global capital and world trade flows. This sparked ideas and excited conversation that led to one of the partners remembering a network of relationships in neighboring region useful to that developing country.  My background having worked on Wall street, principally at Credit Suisse and Deutsche Bank, combined with having built a 501(c)3 not-for-profit in Silicon Valley proved to be KEY to being a useful “translator” for those two different groups at that meeting.      

The experience of working both in the arena of money and the fields of charity (in parallel) has become highly relevant today and is very important, going  forward.  After all, it will be at conferences like this one, hosted by strong global brands like Credit Suisse (www.credit-suisse.com) that will help attract a curious, fast-growing and diverse audience looking to learn more and to become a part of both these worlds — capital and impact, profit and not-for-profit.

Let’s keep the returns beyond financial conversation rolling forward.

Gregory Mark Hill
New York City

ON PLATFORM SERIES: INSIGHT. CO-CREATION. IMPACT. CYBER*SECURITY

The ON Series launches its second event in New York City this month, June 17, 2013, with the newly emerging hot topic of CYBERSECURITY in conjunction with the Harvard Business School Club of New York.  (www.onconferences.com)

The ON Series will again be moderated by Rik Willard to help focus this current awareness to those participating, including entrepreneurs, academics, business professionals and those simply curious in the greater New York City area.  For those that want to learn and to share about the impact of technology, innovation, and collaboration — this conference allows those participating locally or online to then co-create the next ideas and hopefully put them into positive action.  The subject is timely as the world has just experienced the news of an ex-CIA employee sharing publicly about Spying Programs in the US during an interview with The Guardian.

The ON Series is a new resource for those that need access to fresh, inspiring ideas and deep expertise presented in a user friendly format.  The event is time efficient, and also happens to be this coming Monday, at the conveniently located midtown offices of Shearman and Sterling LLP.

Keep an eye on the upcoming IMPACT topics from the ON Series Platform.  Check out a few sound bites from the last ON Series talk on BIOSCIENCE on Youtube:  (https://www.youtube.com/user/ONConferences?feature=watch)

Again, I look forward to being a part of more of this type of idea sharing, going forward!

Gregory Mark Hill,  New York City

June 14, 2013

The ASHOKA Future Forum in Washington, D.C., May 30-31, 2013 — inspires thoughts about “Karma”

I have been invited to come to ASHOKA by a business colleague, a THOUGHT LEADER who is an adviser to the FORTUNE  100.  But now he is looking at working with more nimble, prestigious, and developing organizations around the world, where I believe his “impact” to the CEO, Chancellor or Entrepreneur will be more profound and perhaps his thoughts will get implemented at a faster rate when compared to large multinationals.

The ASHOKA Future Forum is a conference in Washington, DC —  and appears it is another aspect of the world of IMPACT and also where a RECOGNITION of those who created positive impact for society around the world can share more ideas together.   Founded by Bill Drayton more at  (http://www.ashokafutureforum.com).

What is important to notice about ASHOKA and conferences on IMPACT in general these days — with events such as the Green Festival at the Javits Center to Impact Investing conferences held at JPMorgan and Bank of America — is that there is a groundswell of conversations taking place.  

Those conversations taking place today spearheaded from places like New York City, Washington DC, and London where I have been staying this past week are about what the LEADERS in the areas of wealth management, corporate and industrial America, Europe, and government bodies globally are advocating currently — which is how to attract investment capital from larger pools and resources and where to deploy them.   Large pools, sizes enough to be influential, can be done more easily when there are market based returns offered in addition to creating a positive contribution to society.

In researching Ashoka I learned that it is referred to as Samraat Chakravartin Ashoka – the “Emperor of Emperors Ashoka.” His name “aśoka” means “painless, without sorrow.”   Ashoka is also a rare tree that blooms beautifully in the far reaches of the world.

These conferences are where it all starts, however, with a dialogue, a conversation, i.e., when you start TALKING TO OTHERS and sharing ideas and solutions to problems — THINGS HAPPEN.  

This means connecting and talking at the office, at school, at dinner, on your vacations and holidays.   That is where those ideas can get shared openly, and where the fun ideas, and possibly the great ones start to snowball into something more!  This snowball can be a magnetic FORCE during those conversations which inspire activity that speeds us and our listeners into ACTION!  

NOW, this reminds me of the the SANSKRIT word KARMA, another word bantered about quite a bit these days — but most folks have little idea about this words true meaning is and often I heard his word used to say such things as “I have good PARKING KARMA” — meaning I can always find a place to park my car!

The root word of “Karma” comes from the Sanskrit word meaning “ACTION” — but most importantly it means, to be  ACCOUNTABLE and RESPONSIBLE for your ACTIONS.

I am hoping that this conference will not just be about conversations, but about dialogues of change, where actions are inspired to create solutions that will attract capital and talented resources that will turn into investment returns for investors as well as emotional returns for the world.

More later.

Gregory Mark Hill, London

May 27, 2013

As Large Banks enter the Sustainable Arena — An Apple a Day Keeps the Doctor Away

To generate awareness of a new and growing investment sector, often referred to or sometimes called “Impact Investing” — readers need to understand the concept of creating returns beyond financial.  Further, what should be important to everyone is that large Financial Houses are sponsoring and holding many conferences, even internally at places like JPMorgan Chase and Bank of America, as well as at other large banks like Credit Suisse and Deutsche Bank.  I am pleased that this area is slowly becoming important on an institutional level –and is starting with newly created departments called Corporate Social Responsibility or CSR.

To create returns, investment returns by applying the core skill-sets derived from professionals at those large banks and combining that with a positive impact by core principals derived from inspiring leaders together is critical.

Recently, I was speaking with a friend who runs his own FAMILY OFFICE about impact investments, and the various misunderstandings around the word “impact”.   He is a European native (let’s call him the “Dutchman”) and now lives here in the US.   The Dutchman started out in the consumer products and marketing world with a household name like P&G — introducing shampoos and other products to Europe.

He switched into finance when he came to the US.  He and his investments returns were very successful.  He applied lessons from the consumer world to the investment world, by leveraging a few keys learned from the corporate marketing arena — such as Brand, Market Positioning, Leadership and Operating Teams helped him create those successful investment returns.

My background originally was purely Wall Street, M&A, LBOs, IPOs and high tech banking before I moved into the Asian, private equity and business building mode.  Keys learned from investment banking at bulge bracket houses were that large markets, coupled with a needed technology or service provided to those large markets, delivered by solid management teams to those large markets often led to valuable results including wealth creation for our clients, partners and investors.

I went on to have some beautiful life experiences having met many people and leaders from developed and developing nations around the world.  I saw again and again the power that capital had on those markets.  Access to it or lack of access to it directly resulted in accelerated or slowed growth and development.  And in myriad ways, today the results up or down for those countries, markets, their people, their leaders and the local entrepreneurs still remains highly attuned to the level of capital available there.

The Dutchman and I met more than a dozen years ago when we were looking at cross border opportunities between the East and the West.  This was fun and interesting at the time.   We reconnected a few years ago, but what was curious about our new and continuing conversations was that we both had separate, but evolving life experiences that both led us back to similar fields — impact investment.  We also regularly experienced that having capital and access to supportive capital is what drives the best returns along with large markets and good management teams in order to drive revenue and profits to create those attractive returns.

The quick back-story is he had a child, a daughter on the East coast of the US, while I traveled to another East coast along the Pacific Ocean where I saw many children, daughters and sons of emerging countries.  When we started to work together again in New York city, I noticed a change in the Dutchman, a greater acceptance in general and a drive to leave something better behind for his daughter, and perhaps his daughter’s children as well.  I see this in my sister and her two boys all the time.

He started his Family Office among other things inspired by his daughter, and I started a not for profit and a few other projects as well inspired by an important person I met along my journey.  What was compelling, is that our goals had become mutually aligned, independently, to make a positive impact and also create healthy returns beyond having happy conversations about it, but actually doing something about it.

That did lead us to multiple conversations and meetings with corporate brands, significant investors and iconic families about Impact Investment and building Platforms.  Particularly, on how to make significant improvements and increase understanding in the area of impact investing.  Also, to help shift investor awareness about Impact as a “form of charitable giving” with little expectation of more than perhaps an emotional return to Impact being about making market based capital returns AND having a positive contribution to the world.

It may be 5, 10, 15+ years or more before impact investing is as readily investor friendly and institutionally attractive as technology investing is today.  Yet, there are short term returns being made now in this area.   And, I remember being an important part of the banking platforms and on the banking teams responsible in the early days of tech investing — such as for the initial public offerings and strategic financings for Amazon.com, E*Trade and Datek Online Trading which is now TD Ameritrade, and McCaw/Lin Cellular, which became Cingular and now is ATT Wireless.  

So as I remember being part of the large bulge brackets that were leading the way into tech sector investments early on, and it will be critical again, I believe,  that today those same large banking houses lead the way early on into the impact sector.  However, this impact sector will also need participation from larger pools of people around the world in addition to magnetizing the draw of government, academic, research, foundation and philanthropic centers of influence globally.

An example of an impact investment project that creates returns and also makes a positive contribution is one of a mine in Latin America, where the locals were mining for minerals at the top of a mountain where there was a river streaming down to the community below.  In short, because proper water treatment technology was needed as the water became toxic and the mine was shut down and people were affected.  So the local authorities asked for help and the government offered to provide support to the project as well.  The result is that double digit  cash on cash returns can be made for this project while implementing water treatment technology that allows people to go back to work, and the country to have resources to trade and export globally.   Returns, impact.

At the end of one of our conversations, the Dutchman said to me, “What good is it to have $1 billion dollars to buy a hamburger you can’t eat!?”  Very funny, very revealing and very good timing!

The tech sector about 15+ years ago was not well known and wary of investment by institutions and folks generally, but then the tech sector became so main stream that even blockbuster films showed that Forrest Gump’s US Army buddy knew the difference between a fruit company and an Apple…company.

Impact Investing is not simply about agriculture, green, and sustainability and charity investments, it is about how to create market based returns for everyone who wants to participate and should be participating in this new emerging global growth sector I will refer to today as the global impact investment sector.

As an old idiom goes, “An apple a day keeps the doctor away.”  In 1976, a shareholder who sold his 10% stake in Apple for $800 — well today that 10% stake is worth about $40.6 Billion dollars.  I am sure he probably wished he kept that bite of his Apple and today may still be in need of Doctor because of that experience.

I am sure this will be the same for those not participating in the impact investment sector today as you don’t want to miss out of those type of returns, but also not miss out on having an opportunity to create positive global possibilities when your children and grandchildren ask you, “Why didn’t you do something when you had the chance?”  That is the chance to make the world a better place and invest in that sector as well.

The importance of building platforms and investing in the area of Impact Investment globally will generate returns on a similar scale one day, and in the not too distant future.

Gregory Mark Hill, New York City

May 18, 2013

ON Series, New York City Launch!

The ON Series launched its first event in New York City this month, May 7, 2013, with the esoteric and dynamic subject of BIOSCIENCE.  (www.onconferences.com)

The ON Series was moderated by Rik Willard to bring a heightened level of awareness and reach to a hungry pool of “early movers and shakers” with a wish to share technology, innovation, and collaboration with all who participate.

The ON Series is a new resource for those that need access to new ideas and deep expertise presented in a user friendly format, that is time efficient, and also happens to be at a beautiful setting along the water.   Keep an eye on the upcoming TOPICS — BANKING, RETAIL, TECH and IMPACT INVESTING!

Entrepreneurs and Capital find exciting resources here such as new and seasoned leaders, fresh ideas, and good energy — and this will change how the world uses and applies new and old information to build a better FUTURE.

I look forward to being a part of more of this type of idea sharing, going forward!

Gregory Mark Hill,  New York

May 14, 2013