Matthew Weatherley-White wants to help his deep-pocketed clients change the world, and he doesn’t believes they have to suffer financially to make it happen.
As the managing director and owner of the CAPROCK Group, a growing multifamily office based in Boise, Idaho with five offices around the country, he’s put so-called “impact investing” front and center to his firm’s practice. After spending 12 years as a private wealth manager with Smith Barney, Weatherley-White co-founded CAPROCK in 2005; his team creates customized portfolios for 200 families with a minimum of $10 million in assets. He’s grown the firm with a belief that wealthy families, particularly members of the younger generation, have a sincere desire to express their values through their investments.
And he’s a believer: Aligning wealth with investments meant to create some form of social value can enhance both, he says. “Capital markets are the most powerful optimization vehicles on the planet.” Of CAPROCK’s $2.9 billion in assets under management, about one-third is invested with an impact mandate.
Of course, there is difficulty in striking a balance between “honoring the client’s values” and “maintaining a level of fiduciary responsibility.” That’s why it’s so common to see many advisors make a small number of potentially high-impact, but similarly high-risk, investments for socially conscious clients. It becomes almost a sideline to their broader portfolios. After all, these investments are the most “fun” and allow clients to clearly see their dollars at work. Weatherley-White deems this trend “irresponsible.”
His firm’s portfolios, while grounded by the impact investment mandate, adhere to basic tenets of portfolio construction. “We aren’t making grants by another name,” he says. Instead, CAPROCK seeks to “bring together capital with those who seek it, while protecting those who hold it.” The firm claims to gauge impact investments though the lens of conventional finance, analyzing probability of return and the risks associated with that return, and uses a proprietary calculation to let their investors articulate where they are most comfortable on the spectrum between investments that only seek transformative change and those that purely seek a financial return.
The reports show clients “a consolidated and visually enticing reporting of total impact” so that they can still experience the “emotional high” of making an impact without the “big splash” investment.
While there is nothing wrong with one-off donations to charity to enhance the social good, ultimately “capitalism can do better.”
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