Mack International President Moderates Session for the 2018 Opal Group’s Impact Investing Forum in West Palm Beach, Florida, April 23rd

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Linda C. Mack of Chicago-based Mack International recently moderated a panel during the Opal Group’s Impact Investing Forum held in West Palm Beach, Florida on April 23rd. The session explored “The Next Generation of Impact Investors: How millennials will shape the future of the sector.”

Considering profit with a purpose...Many of us believe being socially responsible not only makes sense, but it's the right thing to do.

Linda C. Mack, founder and president of Mack International, LLC, the premier retained executive search and family office strategic management/human capital consulting firm, was invited to be a facilitator for the Opal Family Office Group’s forum on Impact Investing held in West Palm Beach, Florida April 22-24. The panel presentation explored the topic of how Millennials are influencing investment strategies within the family office. Panelists discussed how family offices are incorporating the next generation’s desire to be impact investors and identified some of the challenges faced in accomplishing those objectives. Linda was joined by panelists, Rehana Nathoo, Founder, Spectrum Impact; Keith Mauppa, Vice President, Flat World Partners; Anne Ferola, Director, Education and Strategic Partnerships, Center for High Impact Philanthropy; and Tammi Kesselman, Founder and Chief Strategist, Aligned Investing Capital.

“I couldn’t have been more impressed by the knowledge, experience, expertise and overall caliber of each person on our panel,” said Linda. “It is no wonder they are considered leaders in their respective fields. Their unique perspectives and interesting stories beautifully articulated our topic.”

The conference featured an agenda filled with the “how-what-when” associated with impact investing. The “why” was clear. Millennials are a powerful generational force of investors insisting on profit with a purpose. “Many of us believe being socially responsible not only makes sense, but it’s the right thing to do,” remarked Linda. “And Millennials certainly “walk their talk.” They don’t limit their focus merely to the family’s philanthropic portfolio. It’s the way they look at life…who they work for, what they buy…It’s part of their identity.”

As a result, millennials are bringing impact investing mainstream. According to the panel discussion, companies are going to be pressured into being responsible because it will inevitably hit their wallet. “When a product is boycotted because of the way in which workers are treated, or a brand is ignored due to lack of conservation practices, eventually it will affect their bottom line and stock price,” Linda explained. How long will it be before impact investing is truly mainstream? A poll of the audience indicated their estimation was 5-10 years. Financial advisors are increasingly getting on board to incorporate impact investments into their recommendations and offerings. Several universities are offering formal curriculum in impact investing to address the increasing demand for education and expertise in the subject.

One of the challenges explored by the panel was intergenerational resistance when the CIO or older generation is focused primarily on rate of return versus social impact. According to Linda, there is increasing research showing that one doesn’t have to be sacrificed for the other—you can have both. “When making investments it is assumed that companies that are fiscally responsible are more highly valued than those that are fiscally irresponsible. This same premise is expanding to include social impact – specifically, that companies that are also socially responsible should be more highly valued. Some expect to eventually see evidence that returns will indeed be lower for companies that are not socially responsible.” The panel discussed families who are beginning to align their core values with their investments--not just in their foundations but also within their taxable portfolios. “They are using a common lens across the whole spectrum to make investments truly reflect what the family stands for,” said Linda. Another challenge is defining social impact as it can be subjective. An example often cited by a leader in the field is that of a driverless car. To one person it will put many drivers out of work; to a mother whose child was killed by a drunk driver, it has very positive impact. It depends upon one’s point of view.

What is important for family offices to know if they want to succeed in impact investing? Linda says it is no different than any other form of investing. “You have to have really good, disciplined investors with strong track records. Sourcing appropriate opportunities and employing comprehensive due diligence, monitoring and metrics to assess impact are all key.” According to Linda, some families simply start with a “do no harm” philosophy as part of their initial screening process. “Impact investing is an increasing mindset and sensitivity-- and with that comes momentum towards positive action.”

Overall the panel concluded there is great value in achieving two objectives that were formerly viewed by many to be mutually exclusive. Profitable returns and positive social impact can and do coexist. It is not an either-or proposition. “People are looking at the world differently and challenging conventional wisdom. Whether the area of focus is food, energy, water, agriculture…this next generation is exhibiting a strong track record of success with passion and commitment to making a difference in the world. They are shattering some false assumptions and moving the needle while making significant returns for their families.”    

About Mack International…

Mack International is the premier, boutique retained executive search and strategic management/human capital consulting firm serving family office, family business enterprise, family investment firm and wealth and investment management clients on national and international basis. The firm’s family office clients range from first generation wealth creators to multi-generational families of six or more generations. Founded in 2002, the firm has achieved an exceptional track record of success as evidenced by its unmatched industry expertise, in-depth market knowledge and unparalleled track record of success. Founder and President, Linda C. Mack, has established proprietary methodologies such as the Mack 360© and is credited for having coined the term “expert generalist” in the industry. For more information, please visit: http://www.mackinternational.com.

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