Can you really invest for profit and still do good at the same time?
Absolutely. We were founded on the principle that we can invest for profit whilst creating benefits for communities or society at large. There has always been something of an ideological struggle over this question, particularly within the mainstream North American fund management industry. For many participants, return maximization requires the rejection of strategies that do not add financial value or potentially reduce it.
We come at this question from a different perspective. We are not seeking to build a portfolio with the greatest risk-adjusted financial return possible. We do expect all of our projects to produce attractive returns but that alone is not enough to attract us to the project. There must be an added benefit to humankind that is both measurable and reportable. And, to reiterate, it must not compromise the market return we seek for all of our projects. This is possible because our focus is exclusively on businesses that address issues of human care. Our projects all have the potential to fulfill the needs of communities or society at large. What we try and do is either provide a product or service that was not previously available, or we provide a product or service at a higher quality without material price increases, or we provide a product or service at the benchmark quality but a lower cost or to more people. We believe fundamentally that any product or service that reduces cost or increases access for consumers without compromising quality can outcompete its peers in an open market environment. And in doing so, the product company or service provider not only becomes the market leader but also delivers a net benefit to society by freeing up resources for savings or expenditure on other essential items. Thus, we do not believe that financial trade-offs are a necessary outcome of creating societal benefit; if anything, a “trade-on” is achievable.
In addition, we may also channel benefits from our investment directly back to a relevant community. For example, with an early life science investment, we made a ten-year grant to the local scientific community together with providing supplies of our product pro bono for clinical trials. Ultimately, it’s all a question of priorities for our capital and for our time.