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January 24, 2019

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Family Offices: a new avenue for young impact investors?

October 24, 2018

 Impact investing is growing in popularity. According to Global Sustainable Investment Alliance (GSIA) in 2016, investors hold around $22.89 trillion in socially responsible asset. This was a 25% increase since 2014. Mckinsey (2018) reports that impact investing will grow to $300 billion by 2020. Impact investing does not seem to go away anytime soon.

 

In the midst of the growing popularity saw a rise of a new type of impact fund -

a family office fund. This is different from other institutional funds. Family offices focus more on long term targets, reducing pressure of meeting short term targets. Family offices also face lower regulation, overhead and offer more freedom to operate.

 

The characteristic features of family office funds seem to satisfy the desires of the younger generation who prefer the freedom to explore, a greater work life balance and to work for firms that aim to make a real change in the world. Industry insiders also seem to agree, where according to Financial Times (2018), several hedge funds have converted to a family office fund - Omega Advisors, Seneca Capital and JAT Capital have converted their fund in the last couple of years.

 

However, not all family offices offer the same freedom and opportunities to explore. According to Darbyshire (2018), graduates who have experience working in family office funds stated that some funds still maintain an old philosophy and focus more on preserving wealth than pursuing growth. At the same time, family politics can pose an obstacle for young impact investors who wants to grow their career in the field.

 

Nevertheless, family offices continue to look “for top talent who can apply their skills and grow in a way they think matter” according to John Goldstein at Goldman Sachs (Financial Times, 2018). If young impact investors believe that they can meet the need then joining a family office is an alternative pathway for a future career in a field that can make a real impact to the world.

 

 

“You can punch way above your weight in terms of talent if you’re doing impact investing”

John Goldstein

Family Office Funds:

- New Island Capital - A San Francisco based privately own fund launched in 2006. It main focuses are sustainable agriculture, communities, environment and alternative energy.

 

- Omidyar Network - The fund was launched in 2004 by ebay founder Pierre Omidyar in a joint effort with Pritzker Group (Hyatt hotel investment branch). Omidyar have several branches across the world. Although, the fund focuses on many areas, they offer job opportunities in their own impact investing branch.

 

References

- https://www.omidyar.com/our-work/impact-investing

- http://www.newislandcap.com

- Darbyshire, M. (2018). “Family Office are in a talent grab for young impact investors”. Financial Times [Online]. https://www.ft.com/content/88cadf34-a07c-11e8-b196-da9d6c239ca8 (Accessed 15 October 2018).

 

 

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