15 December 2016 / Kydd Boyle

Visionary Investing for Families - MIT Sloan School of Management

Visionary Investing for Families - MIT Sloan School of Management

By Kydd Boyle

I thoroughly enjoyed my introduction to the family office environment when I interned at Sandaire Investment Office in 2010. A focus on service that is centred around clients’ needs made a lasting impression on me. In particular, I was fascinated by the concept that there is often so much more to wealth than money or investment performance. As a principal-based business, that takes an empathetic approach to creating solutions, Sandaire engages with a rich ecosystem of specialists; all of whom deal with a myriad of issues associated with wealth. Six years on, I’m still fascinated by the business, its access to opportunities and capacity to embrace new ideas.

Richard Blackwell, enjoyed a similarly positive experience as a Sandaire Intern in 2013. As a follow-up, I suggested that he attend the MIT Sloan School of Management’s Visionary Investing Workshop on its campus in Cambridge, Massachusetts. I asked Richard to provide some insight into his experience, as we have both attended the course and found it hugely rewarding.  We hope that this introduction might provide inspiration for other Next-Generation family members and young leaders who want to be more responsible and impactful through their investments.

Richard Blackwell: Like Kydd, I was fortunate to undertake an internship at Sandaire, researching impact and responsible investing. It was through this role that I developed a particular interest in the field and decided to investigate whether my family could benefit from this type of investing, in terms of both financial and ethical rewards. I enthusiastically took up Kydd’s recommendation and set off for Massachusetts, keen to experience campus life and meet other like-minded family members.

This initiative forms part of the school’s new Family Leaders with Purpose Program. It brings together selected families with vision, technology and innovation, equipping participants with the latest thinking and tools on how to invest with both profit and purpose. The main aim of the Visionary Investing Workshop is to provide participants with better decision-making skills and evaluation frameworks for direct investing while helping them to become more discerning about their interests and investment opportunities.

MIT Sloan was already familiar with Sandaire through its work as a co-founder of the Wigmore Association. David Shrier, the co-head and originator of MIT Sloan’s workshop, was intrigued by Sandaire’s duality as a family-owned business, with the founding Scott family invested alongside clients. David initially extended an invitation to Kydd and then subsequently to me and other members of the Sandaire network. It was comforting to know that invitations are restricted to family members only (no family office executives, advisors or bankers are permitted).

Going into the three-day summit, I was under the impression that I would be one of the youngest attendees, surrounded by senior family leaders from around the globe. However, I was immediately surprised to find that the majority of us were Millennials. It quickly became clear that we all possessed a common interest – to gain a deeper understanding of sustainability, so we could report back to our families and instigate real change.

Our common goal: to have a conscious impact via investments that take into consideration Environment, Social and Governance (ESG) issues; not in the hope that the family would consider allocating a small percentage towards this “token” theme, but to instil the notion that investing in a sustainable manner is a logical approach that can generate a meaningful return on investment and safeguard the long-term future.

Drinking Through the Fire Hose

Over the next three days, I experienced what is famously referred to as “drinking through the MIT fire hose”. The information tap is turned on to full, and no matter how hard you try (or how high the caffeine intake) it is difficult to consume it all. Warning: this course is not for the faint hearted but rather for those with serious intent. However, it’s potentially a life-changing experience, so worth the effort.

As members of family businesses, we have a real opportunity to lead the way. As shareholders, we can make specific sustainable demands of the businesses we are invested in, as well as making demands of our own core family enterprises.

In recent years, we have seen shareholders and the public become increasingly more demanding. For example, NGO campaigns and consumer pressure, lead the Norwegian Government Pension Fund Global (GPFG), to withdraw its investment in 23 palm oil companies in 2012. The decision also meant the fund’s policy on climate change would target tropical deforestation as a priority issue.

If Sovereign Wealth Funds can effect change, then why not family businesses? They share the same ultimate purpose: to create value over the long-term, so the Sovereign can preserve capital and generate income for future generations to come.

During the next few days of being “hosed”, we learnt about the processes associated with sustainable and responsible ventures; and what questions to ask; we also had an opportunity to test our new skills by engaging with model companies. Most importantly for us, as Next-Generation leaders, we also discovered how to develop self-knowledge and harness it to engage others.

Whilst there were several takeaways from the three days, the following really resonated with me:

  • You need process, focus and discipline
  • You shouldn’t have to sacrifice returns in order to have positive impact on the World
  • Families have unique advantages that can help management grow companies in ways that traditional venture capital firms may not possess

When considering future investments or analysing companies, the questions I would now ask myself or my family are:

  • Is this company efficient?
  • Does it solve a great problem?
  • Does it take care of those who create, use and come into contact with its products?

I believe these are the principles upon which any due diligence should rest. When adopted appropriately by companies, sustainability produces superior performance and leads to enduring enterprise. Quite simply, in my view, it is capitalism done properly.

The most recent Visionary Impact Workshop took place in London last week and the next workshop will be held in Cambridge, Massachusetts 15-17 May, 2017. If you would like to learn more about MIT Sloan’s Visionary Investing Workshop, please contact David Shrier via shrier@mit.edu or Heidi Pickett at hpickett@mit.edu.

#familyoffice #SRII #sustainability #investing #impact #education #Next Gen #internship

Sandaire is an international investment office delivering tailored solutions for wealthy families and foundations.

We are family-owned and professionally managed, with a 20-year history that provides unique insights into the evolving opportunities and challenges that wealth creates, truly understanding that there is more to wealth than just investment performance.

We know at first-hand that wealth is a very individual thing. We make it our business to simplify the complex nature of wealth so that we can steward and further its potential for our clients.