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• Advisors Forum 2018: How Families Push Investment Boundaries: A Discussion With the Blue Haven Initiative and Cordes Foundation

June 25 2018
June 25 2018

High net worth families face uniquely complex investment challenges, such as navigating family dynamics and legacy issues. At the same time, they often have more opportunity than other institutional investors to take risks and push boundaries. To explore how visionary families build innovative investing practices, Robyn Polansky Morrison, Director of Impact Advisory at Align Impact, sat down with Ron Cordes, Co-Founder of the Cordes Foundation; Eric Stephenson, Portfolio Director of the Cordes Foundation; and Liesel Pritzker, Co-Founder of Blue Haven Initiative, to discuss their experiences in moving towards one hundred percent values alignment.

Ron Cordes co-founded and led a successful investment management firm and launched the Cordes Foundation with his wife, Marty, in 2006, following the sale of the firm. The Cordes Foundation was established with a focus on social entrepreneurship, impact investing and the economic advancement of women, and has since expanded its strategic focus to include ethical fashion brands, sustainable supply chains and engaging millennials in impact investing. Early on, the Cordes family saw the promise of innovative social entrepreneurs in the developing world and that as philanthropists, they had the opportunity, beyond their grantmaking, to channel more investment capital from their foundation’s corpus to support game-changing ventures. During that era, the prevailing philanthropic paradigm largely regarded Program Related Investments (PRIs) as the only investment vehicle suited for such kinds of high-risk enterprises. Ron was drawn to impact investing by a combination of opportunity and frustration.

With support from their legal advisors, the family moved full steam ahead, eschewing incrementalism for bold action: “We knew we might lose some money, but we’d do it as field builders.” In short order, the foundation had moved fifty percent of its endowment, and the growing team, which now included Eric, and Ron and Marty’s daughter, Stephanie, had to ask itself, “Why not one hundred percent?” With Stephanie and Eric’s leadership, the foundation has aligned one hundred percent of the endowment  portfolio with the foundation’s mission and now focuses on finding ways to further optimize their goals.

Liesel Pritzker shared her initial struggle as an inheritor to feel informed and empowered when managing her personal wealth and making investment decisions. In her early interactions, investment advisors came across as condescending and dismissive of her interest in engaging with them on a meaningful level. Determined to do things differently and to become a real steward of her legacy, Liesel recruited more modern management. She began a journey to transform the ways in which her wealth, and ultimately she as a person, were perceived. She hired new advisors who respected her and who shared her points of view on social and environmental issues. In doing so, Liesel demonstrated to her family and peers that responsible wealth management starts with values-aligned investment managers.

With their encouragement, Liesel was able to become bold and directive. She points to MicroVest as one of her “gateway drugs” to impact investing, a product that helped her to understand that all investing is not just about the underlying product but also about the way in which financial instruments are structured and deployed. Working with Aperio helped her to identify her social and environmental priorities, some of which surprised her: “I realized I cared more about fair labor practices than the environment.” She was then able to run with that and customize some of her concerns into investment vehicles.

Today, Liesel serves as an investment strategist for Blue Haven Initiative, her family office, with assets under management of $500 million and a one hundred percent commitment to investments that seek market rates of financial return as well as maximum social and environmental impact.

When asked what the future of investing should look like, the panelists agreed that a one hundred percent mission-aligned approach for foundations includes everything from grants to investments. Capital must be deployed strategically, with a clear purpose in mind. Is this truly charity? If not, what are the expected financial and/or social outcomes and what are the reasonable returns?

Liesel left the audience buzzing with a powerful statement:  “High- net individuals, some of your clients, need to set the bar a lot higher for themselves. At the very least, they should prove that they aren’t causing harm through their wealth management before they take credit for doing good for the world with their philanthropy.”


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