I was born and raised in apartheid South Africa and lived there until I was ten. As I grew, the terrible inequity I witnessed taught me that I didn’t get where I am due to discipline and hard work alone, that the luck of my birth and parentage and immigration played a huge role. Had I been born with dark skin (like 90% of my country people), I’d have had a very different life in front of me.
Having spent my first decade as a witness to such inequity, coupled with an upbringing by a psychotherapist mother and business enterprising father(s), when it came time to choose a path for my future, my existential dilemma was whether to pursue personal growth or wealth as the best way to make myself feel whole.
So, I did what one naturally does when faced with large life decisions in their 20s. I took my mullet and my Guinean beads I’d bought at a drumming festival and headed to India with books like Money and the Meaning of Life by Jacob Needleman in my backpack. During that trip I did a lot of yoga and wrote in my journal frequently. It was during that time that I realized it didn’t have to be an either/or decision. I chose both personal growth and wealth, which led me to create a company that integrates financial and behavioral advice, with the mission of expanding what’s possible with money.
I’ve been investing for social and environmental impact since 1993, first personally, and then beginning in 1996, professionally. I, along with my wife Britta, and our two sons, are particularly focused on climate change, animal welfare, women’s rights, financial empowerment, and poverty alleviation. We address these issues through my work at Abacus, as well as with our personal public equities and bonds, private equity, and strategic philanthropy. 96% of our investments are currently invested sustainably.
So, what does our family portfolio actually look like today?
I think it’s important to state at the outset that my wife and I make all financial and investment decisions together, and as our children have become young adults, we’ve involved them more and more.
Keep in mind that my day job is running a firm with about $3 billion in assets under management in alignment with my clients’ values and personal goals. Some of my clients are passionate about a particular issue – extreme weather from climate change, neighborhood gentrification, or regenerative agriculture – and our job is to build them a portfolio that achieves their social aims while also earning an appropriate financial return for their needs.
Our family portfolio is a bit atypical. Since I believe in walking my talk, the same investments that our clients own can also be found in my family’s accounts. But we’ve also invested in a number of businesses that I wouldn’t recommend to a typical client, either because they’re quite risky (and I’m aiming for an extraordinarily high impact or financial return), or because Abacus, the company I co-founded, gives me a ton of exposure to the ups and downs of sustainable, public stocks and bonds.
Our family’s largest asset, by far, is our equity stake in Abacus. I feel that Abacus makes a positive impact in the world (it’s a founding B-corporation, is carbon neutral, donates 1% of revenues to charity, helps a few thousand people worry less about money, and invests their combined $3 billion in companies doing good for society). The tricky part is that Abacus is a small, privately held business, and its revenues are closely tied to the global economy. In the Great Financial Crisis twelve years ago, my share of profits fell to nearly zero and my share of the company’s value was cut in half.
Because of this somewhat traumatic experience, we now invest our non-Abacus money in companies and real estate that should hold their value better in the next crisis. I also do what I’d tell any client to do with a private company dominating so much of their balance sheet: I sell off a small portion of my stake each year to reduce exposure and help rising stars in the firm have more opportunity.
So, where do we put the rest? I’ll start with some of our most risky (and hopefully impactful) direct private investments in for-profit companies:
Venture capital and private equity funds – These are a little less risky thanks to diversification:
Real Estate
Publicly traded stocks
Our philosophy when it comes to stocks is to try to own a highly diversified, index-like basket, but to exclude ‘bad’ companies, own a lot more of ‘good’ companies, and make our voices heard by management when possible. Our portfolio has:
Bonds
We own a combination of individual bonds and bond mutual funds (which lend to companies and government agencies) and which focus on their use of proceeds, preferring these sectors:
While this portfolio may not be perfect, and we’re consistently looking for ways to improve and deepen our impact in areas that matter to us, this is the portfolio that is right for our family and represents our shared values.
If you have any feedback or personal reactions, I’d love to hear.
- Brent Kessel, Founder & CEO, Abacus Wealth Partners