FAST COMPANY: Impact Investor
By Lisa Katayama
In the third of our series on social entrepreneurs, we profile a money manager whose epiphany in Uganda helped create a whole new online portal for global social investing.
Call it a midlife crisis gone terribly right. After 28 years in finance, Ron Cordes–co-chairman of the $21 billion asset management firm Genworth–is dedicating his energy to building an online portal that will make impact investing a whole lot easier.
“I spent the first half of my life building businesses designed to be the best in the world,” Cordes tells Fast Company. “For the second half, I really want to support businesses that are the best for the world.”
As he approached the age of 50, Cordes found himself in ruralUganda, in a village five hours off the beaten track. The place was full of widows who had lost their husbands to a two-decade long civil war; Cordes had funded a small microfinance program there, and the women were now running successful small businesses and supporting their kids. “One woman came up to me and said, ‘We appreciate it when [white people] come to try to save our children, but we need to be able to save our own children. Thank you for investing in us so we can do that.’ I’ll never forget that moment.”
That was the moment Cordes realized empowerment was more powerful than pity. He started to brainstorm ways in which his expertise as a financial manager could help create opportunities like this on a much larger scale. Now, with a new product he’s calling ImpactAssets, Cordes is adding a crucial element to the impact investing space.
ImpactAssets is a platform that will bridge high-rolling investors with social enterprises. Financial advisers will find information about solid impact investment options. The absence of a good system of finding, processing, and measuring impact investments, he says, is barring billions of dollars from being invested in good causes. “There’s no ecosystem to help advisers have conversations with their clients about social and environmental investments,” says Cordes. “U.S.investors own $37 trillion of investment capital. Even catalyzing 1% of that is $370 billion–enough to have amazing, groundbreaking, life-changing differences.”
Most people already have philanthropic causes that they support. Meanwhile, entrepreneurs all over the world are starting businesses within these issue areas that are also investable business opportunities. “Part of the process is to create awareness that these opportunities exist,” Cordes says. “Once people are aware, we need to create opportunities to turn that awareness into engagement, and then to turn that engagement into actual dollar investments. That’s what’s going to solve problems.”
At the Clinton Global Initiative in September, Cordes introduced the Global Impact 50 Index, a database of the top 50 managers in social and environmental impact investing. “Right now, there’s nowhere to go for information on who’s managing money and providing investments and funds in this space,” he says. “We are going to be the go-to resource for the financial adviser community to engage clients in discussions about social investing.”
So when clients go to their financial advisers asking what impact investing is, or how to incorporate their favorite causes in their investment portfolio, the advisers will be able to dig up information on ImpactAssets and make informed suggestions–they might tell a client interested in microfinance about MicroVest in Washington DC, which has a strong track record of managing funds investing in microfinance, or clue a fair trade enthusiast into RootCapital in Boston, which provides supply chain financing for farm cooperatives around the world.
“We intend to build an array of products to cover multiple issue areas and geographies across a broad spectrum of asset classes, including both debt and equity,” Cordes says. ImpactAssets is slated to launch in the first quarter of 2011. “I’ve never been so excited about getting up in the morning. Philanthropy alone won’t solve the world’s biggest problems; I see a higher social purpose and a real opportunity to move the ball forward and make a difference.”
[Photo: John Murray]