Financial Independence and Wealth Generation Starts with Due Diligence

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 If you want to find a real prince you need to kiss a lot of frogs! The problem that most wanna-be entrepreneurs experience is that they have to go through a lot of failures and disappointments before they find what they are looking for, but finding something valuable always requires persistence, patience, and the willingness to learn from your mistakes and they don’t have the balls, brains or guts to achieve the success that they aspire to achieve. 

An entrepreneur needs to take risks and make mistakes along the way, and failure is a necessary part of the journey on the road to success for anyone hell bent on victory. My advice to would be dreamers is Never, Never ever surrender your reverie of finding a pot of gold at the end of the rainbow, no matter how difficult the path may seem, believe in yourself, work hard and smart and never be afraid to fall flat on your face, for it is only through the gate of failure that you discover, mature and achieve the greatest triumphs. 

I have spent decades involved in the higher for- profit vocational education sector and I want to share with you the foundation of finding, evaluating, buying, fixing and building for profit vocational schools and then exercising an exit strategy after 3-5 years with 30-40 times returns on your leveraged investment. Starting with a $1 million investment and with 8-times leverage your ROI will be $240 to $320 million in 3-5 years if you play your cards right. I do not know anywhere else that these returns are possible and the best part is that it is accomplished with infinite attention to compliance, student centricity, staff harmony and a professional team that serves students no matter what their level of academic performance was when they started at a vocational school of higher education. 

The best chance for success in the higher education sector necessitates that you have a minimum of 5-10 years boots on the ground experience and can assemble a AAA class team to work with you. The game starts with your “skin in the game” so be prepared to have 10% of the purchase price in the bank before you deal yourself in to being an entrepreneur in the higher education sector. 

Every investor that you approach will want to see your Benjamin’s and access the strength of your team! The project vocational institution that you want to acquire is important, but the most carefully thought-out plans can fail due to unforeseen circumstances or events beyond our control and an investor, your investor wants to minimize his risk and increase his ROI, so your team needs to be flexible and adaptable in the face of change. 

During your working career it is important for you to network with smart and contrarian people that you can learn from and I cannot think of a better organization for you to bond with than the Financial Policy Council (https://financialpolicycouncil.org/). Here you will meet entrepreneurial men and women who have made it or are making it now and they can help guide you when you have problems and introduce you to investors for your project. 

You have the skin in the game, the team, and advisors so it is time for you to select your target acquisition. Higher Education Vocational education is a small vertical market. In 2019-2020 there were approximately 900 for-profit vocational schools in the United States. If you have spent your networking years well you should know at least one hundred people in the industry that can advise you if a school they now work at of have friends working at may be for sale. Listen to them closely and research the schools that they have provided to you. It is also in your best interest to purchase an entity that is not currently on the market for sale. You will establish the market where one did not exist by your interactions and reputation. This will lead to a shorter time to complete an acquisition, cut out the brokers, advisers and banks and increase your student outcomes, their retention rates, student and employee satisfaction, impact on society as a whole and your exit ROI. I have also found that owners who have not put their vocational schools up for sale are usually more involved, better operators with less to hide in the due diligence process. 

In future blogs I will explain how to target a school, meet its owner, and establish a rapport, estimate a purchase price and an enterprise value and start the process of negotiation to purchase the entity. While my directives are targeted for vocational for-profit institutions of higher learning, the principles are basically the same for whatever silo your acquisition falls into. 

I am jumping ahead to the guts of this blog which is a synopsis of the due diligence process which every acquisition requires. Every prince or princess has pimples so don’t fall in love with your acquisition/seller and maintain a composed and rational demeanor, not putting too much trust or faith in what you are told by a seller. “Accept but Verify” to strike a balance between being too skeptical and too trusting. Being overly skeptical and suspicious can lead to missed opportunities, misunderstandings, and strained relationships. On the other hand, being too trusting and gullible will lead to being taken advantage of, making poor decisions and have a direct relationship to your exit strategy. 

Due diligence is an essential process for anyone considering investing in or partnering with a for-profit vocational higher education institution. It involves a comprehensive review of the institution’s financial, academic, and operational performance to identify any potential risks, red flags, or areas of concern. 

The due diligence process helps to identify potential risks associated with buying, investing in or partnering with a higher for-profit education institution. I use a list of 150+ touch points in my due diligence process which covers the essential information that I need to understand the institutions culture, potential for growth, the path to an exit strategy and the anticipated ROI. (I will cover these touch points in future blogs.) 

The extensive due diligence process that I employ identifies financial threats, regulatory perils, legal threats, and reputational hazards to name just a few of the touch points on my list. It is the sine qua non imperative to evaluate the financial performance of an institution, including its revenue, profitability, and cash flow. This provides insight into the institution’s financial health and its ability to generate returns on investment. 

The due diligence process also evaluates the quality of academic programs offered by the institution. This includes reviewing the institution’s accreditation status, faculty qualifications, student outcomes, and other relevant factors. Parenthetically, it is most important to evaluate the competitive landscape of the institution, including the strength of its brand, reputation, and market position. 

Last but not in any way least is the evaluation of an institution’s compliance with regulatory requirements, legal obligations, and ethical standards. 

Compliance is extremely important in the for-profit education sector, as it is in any industry that is heavily regulated. For-profit education institutions must adhere to a complex set of laws and regulations governing their operations, including regulations related to accreditation, financial aid, student outcomes, marketing, and more. 

Non-compliance with these regulations can result in significant legal and financial consequences, including fines, loss of accreditation, loss of eligibility for federal financial aid, and reputational damage. These consequences can be particularly severe in the for-profit education sector, where institutions are often heavily reliant on federal Title IV financial aid to fund their operations. 

In addition to the legal and financial risks associated with non-compliance, failing to adhere to regulations can also lead to poor student outcomes, such as low graduation rates and poor job placement rates. This can harm students and damage the reputation of the institution, making it more difficult to attract new students and remain competitive in the market. 

For these reasons, compliance is always my top priority in purchasing and running for-profit education institutions. It requires a dedicated and ongoing effort by an astute team to monitor and ensure that all aspects of the institution’s operations are in compliance with the relevant laws and regulations. This often involves significant investments in staff, systems, and processes to manage compliance and mitigate risks. 

The results of due diligence will impact the selling multiples based on EBITDA (earnings before interest, taxes, depreciation, and amortization) in several ways. If the due diligence process reveals positive results, such as strong financial performance, high-quality academic programs, and a positive institutional culture, the selling multiple based on EBITDA may be but will not necessarily be higher. On the other hand, if the due diligence process reveals negative results, such as poor financial performance, low-quality academic programs, and compliance issues, the selling multiple based on EBITDA will be appreciable lower. I always look for schools with some compliance issues as that lowers the EBITDA multiple for a purchase and I know from experience that most compliance issues can be corrected with an astute team of managers. 

In summary, due diligence is important in higher for-profit education to evaluate the institution’s financial, academic, and operational performance and identify potential risks and opportunities. The results of due diligence can impact the selling multiple based on EBITDA, depending on the strength of the institution’s performance and compliance with relevant standards. The objective of my due diligence is to get the information that I need to find the untapped potential of an acquisition, estimate its intrinsic value, purchase it at a low EBITDA multiple, have my team do their magic through branching, new program introduction, better marketing, reduced student turnover and the sell the entity in 3-5 years at a 30-40 time returns on my investment. In my next blog I will address the issue of finding the best entity to purchase and convincing an owner to sell his school to you. 

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How to Form Good Money Habits in the New Normal

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There’s a lot about the pandemic period that you want to forget. For much of it, you’re either isolated, broke, or sick, which can be detrimental to your physical, mental, and financial health. As everyone is coming out and heading towards the new normal, good money habits are something everyone needs to keep. 

With so much uncertainty coming into the future, a better focus on money matters can help shift you into better habits. There are so many financial improvements we can do in our lives now that we’re going back outside. Here’s how you can form good money habits in the new normal and be more ready for the future. 

Start Your Financial Planning 

One good money mindset to have in the new normal is to “step back, then step forward.” In simpler words, you need to plan first before moving forward with any big spending. If you intend on going for a vacation or buying something big in the coming months, it’s time to reevaluate your future plans. 

Think about the bigger picture when it comes to your financial health. Sure, you can start cutting down on your coffee and save pennies on the dollar. Instead, you can take a step back and give your life a good, long think. How do you visualize where you are in a few years? 

Ask yourself a few crucial questions: 

How much savings do you have?
How much should you save every month?
Do you want to work from home or from an office?
What kind of investments are you comfortable having?
What kind of insurance do you have? 

Change your answers to these questions according to your long-term needs. Planning is an ever-changing exercise that needs consistent attention. You need to make sure that your plans are not “dreams.” You want them to be actionable, with a specific timeline to help you achieve them. 

Enjoy, But Don’t Go Crazy With Your Money 

Post-pandemic, people have pent-up energies. Everyone wants to go places, enjoy a vacation, and go out to town. There’s a big desire to go out into the world, do the things they’ve always done, and go wild if they can. It’s not bad to enjoy your hard-earned money but remember to go back slowly. 

Don’t go crazy with your money. Make sure that you have enough money to live through the month. Have a plan in place to pay for entertainment expenses so you can play around guilt-free. Even then, don’t go into debt just because you want to feel alive. 

Look for deals available out there, especially now that businesses are looking to get people walking through their establishments. Living your life means living beyond the moment. Saving some money now takes a good amount of discipline to do. 

Stick To A Budget 

One of the financial areas that everyone had to learn over the pandemic was budgeting. Sticking to a budget was a must because having cash on hand can be useful when emergencies happen. Being prudent with your disposable cash means you can take stock of your needs and potential expenses. 

Once we move on to a life post-pandemic, budgeting needs to stay. Not only will it help you prevent overspending, it will also give you a sense of control with your life. As everything gets better, you can generate long-term savings and help you get out of debt or, at least, avoid getting more. 

Practice frugal, rather than discretionary, spending. Once you’re in a pickle, it’s crucial to know which parts of your lifestyle to cut off. Less spending on travel, eating out, and going to concerts means more savings for you. Reevaluate your cash flow and stick to a set budget for every expense you have. 

Live Within Your Means 

The idea of “living within your means” can be a problematic aphorism but the truth is that you need to stay within how much you can pay for a certain period without going into debt. Many who lost their jobs suddenly had to cut back on credit card spending and learned that they were going beyond their means, which is never good news. 

Living within your means is not restricting yourself from your own money. Rather, you need to understand that spending for something out of budget means you need to pull it off somewhere. Even if you take out the credit card to pay for it, the payments that go towards your card should increase. 

There are many ways to monitor your spending and do your best to live within your means. It’s one thing to create a budget and it’s another to live within your budget. If you want to maximize some areas of your budget, you need to cut in some areas that are far less important for you. 

Build A Six-Month Emergency Fund 

The six-month emergency fund feels like a big number to strive for but you will thank yourself for getting it once you need it. The rule of thumb is to have six months’ worth of your monthly expenses prepared as your emergency fund. This money should also be easily accessible and not in any type of investment where you can’t easily pull it out. 

Six months’ worth of expenses can be the absolute bare minimum time you would need to find a new job. It can be your period of recovery from an accident or illness. If you can afford to, it’s best to create emergency funds for up to a year. It can be challenging to meet this astronomical number, especially for cash-strapped individuals, but it should be worth it. 

Start with a small amount. As you’re still healthy, build towards the number by chipping away at it. If any financial issue comes up, this should be money that you can fall back on. A 6-month fund should give you ample financial security to find your way back, while a 12-month emergency fund can give you better freedom of choice. 

The Bottom Line 

Forming good money habits in the new normal can be one of the biggest financial challenges you face. Apart from having to prepare for the worse, it’s a lot of the boring stuff that most people overlook like budgeting and staying within your means. Then again, these will benefit you and your loved ones over time. 

Follow the money tips above and see why you need to reevaluate your spending habits. As you make personal and financial adjustments, you will slowly achieve the life you want. 

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Real Wealth Creation: Wealth for Generations to Come

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Everyone wants to craft some “genius” plan to become wealthy, but how many people are actually planning to create long term generational wealth. To be honest, it’s quite easy to gain massive riches and fortune for yourself, but the challenge is creating and sustaining that wealth, not only for you, but for your family and generations to come. The goal should never be just to get rich quick, you want to make sure that you have a chance to make an impact on others and that your family is set for life.

So many people complain about the gap in wealth, but only want to accept solutions where wealth is just handed to them. This is not how real life works. Nobody’s going to give you anything in life for free. It’s up to you to go out and grab it, otherwise it’s going to come with a major price…your freedom. If you really want to make a difference in the gap in wealth, your focus should be on building wealth and passing on your financial knowledge. Building your legacy. Family wealth opens up other opportunities for the empowerment of other people when it comes to education and careers.

Don’t be fooled, building your legacy and working to close the wealth gap isn’t solely about leaving a large inheritance. Not everyone will be able to do that in their lifetime. But, we can all do our part to give the next generation the tools they need to succeed. If you are just reconciling yourself to building up your savings, the thought of saving for the next generation can be overwhelming. So don’t find yourself discouraged because you’re not saving millions of dollars to pass along. Generational wealth is just as much about money and wealth as it is having the right financial skills, and values that are passed onto the next generation. Your family will benefit long term just from giving them access to a deeper understanding of socioeconomic issues and barriers that would otherwise limit them.

Besides, if you don’t educate your children about money management, they are likely to go on a spending spree and take your wealth for granted. This means that the prosperity of the generations will last only one generation, which alone is unsustainable, and the third generation will start from scratch. That is why you can go a long way to ensuring that the value of your money is a priority when you are drawing up your plan to generational prosperity.

Outside of just passing along financial knowledge, there are a ton of ways for you to create generational wealth. And no, they don’t require you to be millionaires.

  • Investing in stocks is widely accepted as a way to build long-term wealth and probably the most obvious
  • You can also increase your generational wealth by investing in real estate or expanding your business. Unlike equities, real estate is an illiquid investment strategy, and can be bought and sold with a much higher return than equities, owing to its high volatility.
  • Creating a family business. When you think of real generational wealth, you often think about wealthy families who continue their generational wealth through their well-known companies, but most of these companies started extremely small and continued to grow over many generations. These companies not only created generational wealth for their families but have impacted whole communities through creating jobs and empowering the economy.

And these are just a few of the ways you can ensure that you pass on the wealth of your generations appropriately.

Of course, not all families will be billionaires, but you can pass on skills and values that your children can use to build a better life and create wealth that could eventually be passed on to your grandchildren. If you leave something behind for your child or grandchildren, it will also bring about the prosperity of the generations. For example, you can invest in stocks and real estate and build your business so that you can leave some of it with your children. Just imagine the difference it would have made for your life if your parents had fully funded your college education and made a down payment on your first house.

Once you have children, take the time to teach them about personal finances and start a vehicle to secure their financial future. Instead of paying off debt and saving for a down payment, you could invest and start a business, or even invest in your own business. Give them the financial headstart you wish your parents would have given you.

Trust and believe, waiting around for someone to save you and your family is a waste of time. If you want real wealth, you have to go out and grab it. Laying the foundation now is the first stepping stone. So, don’t fall for the media hype that makes building wealth seem like some huge secret that only an exclusive group has access to. That’s simply not true. You don’t need a deep introspection or personality test, just to find your motivation. You don’t need the media to define what is right for you and what is not. What you need is the knowledge, the drive, the willpower to reach out and grab the life of wealth and freedom that you desire.

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Venture Finance in the MENA Region: Challenges and Opportunities Ahead

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I recently had the pleasure and honor of participating in the Digital Mashraq Forum (DMF) under the patronage of HRH Crown Prince Al Hussein Bin Abdullah II, the Ministry of Digital Economy and Entrepreneurship in Jordan and the World Bank Group.
The high-level affair to discuss the future of digitalization in the region attracted upwards of 500 attendees from public and private organizations across 25 countries. The DMF hosted a VIP pre-reception and an immersive two-day program with 26 panels, 69 speakers, 40 startups and 22 investors on board. A commendable success to orchestrate such a powerful platform.

The caliber of men and women was unexpected, to say the least. It was most certainly a remarkable experience to be surrounded by so many educated, talented, sophisticated, pleasant, informed, ambitious, engaged and relentless humans for three days.

Although a regional event, it was without a doubt global. Entrepreneurs, companies, VCs and public officials from MENA, Europe, Asia, Africa and throughout the US all doing great things.

Back in Business: Ripe, Rich and Ready

It is no secret – The Kingdom of Jordan is on the brink of breaking through bureaucracy to bring in billions of dollars and it’s only a day away. The events taking place are defying the antiquated sentiments that postulate a lack of resources as an uncontended culprit preventing a rapid evolution to modern economic and social systems. The fact is there is abundant capital and it’s high-time this wealth is unlocked and effectively allocated to achieve its full impact-potential.

Public-Private Partnerships

Once again, it is as much about the caliber of people and companies and the ambitious agenda the DMF sets to advance as what it symbolizes. The conference concluded with the release of “Amman Communique,” announcing Jordan’s plan to launch a regulatory reform process and digital transformation strategy by the end of 2019 to improve the Kingdom’s business environment. The communique also addressed the government’s commitment to open the National Broadband Network (7,000 kilometers of fiber) for public-private partnerships (PPP).

For Jordan, the meeting was one of many recent government-backed initiatives that emphasize its commitment to back and empower entrepreneurs, create a conducive business environment, and advance robust public-private cooperation.

The Role of the Central Bank

My partners at Blackhawk and I strongly believe the Central Bank of Jordan can serve a fundamental role in leading a PPP that will open up the flood gates of capital.

Consider Lebanon, a neighboring country in the Levant, that instituted an impactful PPP model. In 2014, The Banque du Liban (Central Bank of Lebanon) introduced Circular 331 to bolster the Lebanese ‘Knowledge Economy.’ It is proving effective despite the Central Bank’s massive debt and the country’s stormy geopolitical climate.

In fact, Circular 331 which encourages commercial banks to invest in startups is clearly one of the boldest and smartest initiatives undertaken so far by the Lebanese government. For the uninformed, the Central Bank now guarantees up to 75 percent of the value of a commercial bank’s investments into a startup. That move opened up a potential of $400 million that could be invested into venture capital funds or directly into startups. Circular 331 has clearly taken it up a notch by encouraging venture financing.

This model can be similarly emulated in Jordan to open up the flood gates of capital second to none; especially given the fact that Jordan has half the Debt/GDP ratio of Lebanon.

The Flood Gates of Capital

Purposing a public-private partnership of this magnitude to create professionally managed pools of capital in Jordan will create an octopus of opportunities:

  1. More Capital: The capital injection will increase the number and variety of VCs which would in turn fund and empower more entrepreneurs.
  2. Take Jordanian Companies Global: Such program would establish new VCs of the highest caliber with qualified experience that not only meet local-standards but have the aptitude to fair-well globally was well. More globally competitive VC’s mean more globally competitive companies.
  3. Larger Pools of Capital: It will serve to develop and expand the current VC system exponentially. Most VCs in Jordan today are basically restricted, for the large part, to seed-stage. This opportunity would allocate capital to equip new VCs to mature and develop seed to later-stage companies. Larger VC pools of capital will serve to accelerate the growth and scalability of the companies they fund, positioning them compete in global markets.
  4. Empowered Entrepreneurs: With new VCs and larger funds, a whole new spectrum of entrepreneurs will have access to capital. Consider the shift in dynamics that would follow – Consider companies or entrepreneurs that don’t conform to their capital providers but are forced to comply to secure their financial survival. This desperation leads to discouragement which in turn stifles individual potential and the evolution of their enterprise. A robust VC model will pierce this paralysis and protect innovation capital, a source of national wealth.
  5. Green Light for Foreign Investment: This government-backed initiative gives outsiders the greenlight – Jordan is open for business. The blessing and support of the Kingdom boosts investor confidence, garners respect from national leaders and will certainly serve in reaching their FDI targets, probably overnight.

Looking Ahead

Make no mistake about it. At the end of the day, it all boils down to access to professionally managed pools of capital that can make a real dent in the marketplace. You can have the smartest and most educated entrepreneurs on the planet but without “smart” capital backing them, their projects are nothing but a pie in the sky. Silicon Valley is a prime example in this regard. Without Sand Hill Road backing the entrepreneurial spirit and companies of the Valley back in the early 80s and 90s, the tech giants of today would have never existed.

Just as it has in the United States, the worldwide democratization of capital will democratize industrial assets and produce an explosion of job creation the world over. The MENA region needs this more than any region in the world. And the capital revolution, which so changed America in the last third of the 20th century, is only the prelude to the other two major revolutions of the 21st century — the worldwide democratization of venture financing and of knowledge. These three revolutions, each aided by emerging technology, provide hope that the 21st century will be able to avoid the terrible Middle East conflicts of the past hundred years and become a new Age of Enlightenment. Our children won’t have opportunities unless there are opportunities for everyone.

*Zana Nesheiwat is a Partner and wealth-curator at Blackhawk Partners, Inc. charged with building valuable brand assets, originating and optimizing strong partnerships, and advancing investment opportunities that benefit all stakeholders.

Blackhawk Partners Inc. is a New York based private “family office” that is in the business of originating, structuring and acting as equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings for both US and emerging market companies at all stages.

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The Financial Power of Impact Investing

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For many years the divide between instruments of philanthropy and investing has been clear cut. Investing strategies typically did not involve social organizations focused on non-governmental organization (NGO) concerns. However, the advent of millennial investing power, the rise of social enterprises, and the need for further asset diversification have blurred the line between both industries. Environment, Social, Governance (ESG) investing, informally known as impact investing, is on the rise with both active and passive investors. For example, ESG assets under supervision at Goldman Sachs have grown from US$3.8bn in 2015 to US$6.5bn end of fiscal 2016. As Goldman Sachs poignantly stated, ESG investing is now mainstream even within the pension fund and insurance sectors.

Even though financing social causes has overlapped between philanthropy and ESG investing, by no means is the latter non-profit seeking. First, while impact investing may dive into sectors once thought as solely philanthropic, let us make it clear that the investing strategies used to generate returns do not veer from tradition asset management practices. Specific return objectives are set, even if the companies that are in the portfolio may comprise all social enterprises. In fact, Goldman Sachs recommends that investors should be even more aggressive with risk/return analyses when it comes to ESG portfolios, to ensure even more accountability. Traditional sectors tend to put the bottom line first by nature, so it is of utmost importance to hold for-profit social enterprises accountable for revenue and profit estimates.

U.S. Trust’s “Impact Investing: A Guide To Doing Good While Also Doing Well” gives an excellent overview of impact investing. According to the U.S. Trust, managed U.S. assets committed to impact investing in total grew from US$640 billion in 1995 to US$6.57 trillion at present. Impact investing can be broken down into further categories of socially responsible investing (SRI), faith based investing, green investing, and values based investing (VBI). For example, an investor who is against tobacco use but is not necessarily pro-environment may seek investment in an SRI portfolio, but not a green portfolio. As with traditional ETFs and mutual funds, diverse social investing asset classes are available via equities, bonds, REITs and even private equity. Investment funds including these ESG options in have indeed increased from 55 to 925 within the last two decades. In particular, U.S. Trust’s ESG investor pool jumped 23% from 2015, with a whopping 93% of millennial investors who have added ESG components to their portfolios!

ESG investing is an excellent mechanism to be considered by shareholders through engagement and by Board of Directors through guidance and governance. Rick Scott, Vice President of Finance and Compliance at the McKnight Foundation, gave great insight as to the need for adding and monitoring ESG components to investment strategic directions at the Board level. The McKnight Foundation has allocated 10% of its US$2bn portfolio strictly to impact investing with a focus on US clean water and carbon footprint. Scott enlightens that the Board must call for a “triple bottom-line for financial, programmatic, and learning return.” Boards must have an investment or risk committee assigned to give oversight on risk/return objectives specific to the triple bottom line, and with C-Suite determine the healthy mix of ESG and traditional components for portfolio investments. We have said time and time again that clear internal corporate governance goals and procedures, in this case adopting a “triple bottom line” approach, is the most pertinent form of corporate social responsibility an organization can practice.

While global institutional investors have now become ESG investing stalwarts, retail investors, individual private investors, and minor shareholders may still need direction in how to effectively embark on the ESG investing journey. In addition, the ESG investing sphere has been known to be have quite a few ‘greenwashers’ with more public relations talk than actual profit generating. As with any investment vehicle, extensive research is recommended. Global investment firm Cambridge Associates has developed the Impact Investing Benchmark which comprises 51 private investment closed-ended funds dealing strictly with the intent to generate social impact. From this data, Cambridge Associates created and MRI Database, and uses ImpactBase extensively as well. U.S. Trust as well has developed benchmarks via an IMPACTonomics™ program, which has specific in-house and third party impact investing platforms such as the Breckinridge Sustainable Bond Strategies and IMPAX Global Environmental Markets Fund.

Many have the misconception that impact investing precludes investing in traditional industries, such as the fossil fuel and mining industries. Absolutely not! The smart and savvy investor must see diversification opportunity in line with tailored return objectives. There is financial power in such comprehensive asset management. The end point is return on investment, whether from most profitable traditional, social, and technologically advanced companies in the market. A gold mining company with a strong, proven corporate responsibility background can share the same portfolio as a profitable microfinance company that lends globally to small entrepreneurs. Again, the crux of investing in any asset class lies with return objectives. ESG investing, like smart technology, is no longer the niche market. As Rick Scott and Goldman Sachs put it, the point is to find the “right tools for the right time.” The time is right to consider impact investment vehicles in tandem with traditional market portfolios.

SOURCES

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