Sameer interviews Jennifer Kenning, Managing Director of Impact Investing at Align

image credit: Blue Ocean Global Technology
 
Blue Ocean Global Wealth: Jenn, thank you for taking the time to interview with Blue Ocean Global Wealth. What is Impact Investing?
 
Jenn: Impact investing is not an asset class. We believe it’s a lens through which one can make investment decisions that align with their personal values. Impact investors are looking for investments that generate a social or environmental outcome while maintaining competitive returns. These types of investments may make a tradeoff between financial return and impact potential, but they don’t have to. We believe that everyone is an impact investor and that all investments have an impact whether you choose to acknowledge it or not.
 
For instance, you may be concerned about climate change and actively taking steps to reduce your carbon footprint. However, if you look at your 401k, it may contain some of the largest polluters on the planet.
 
If you are passionate about a social issue, you should make sure your portfolio is aligned with that cause. It’s possible you’ve spent many hours and charitable dollars combating child labor, yet a portion of your portfolio is invested in the apparel industry. Impact investing seeks to reconcile these differences.
 
 
Blue Ocean Global Wealth: Why are you passionate about Impact Investing?
 
Jenn: I’m passionate about impact investing because I believe we have the opportunity to use both investment and grant capital to develop solutions to global problems. I believe in the power of capital and its ability to create sustainable solutions that may not exist in a traditional grant/NGO model. I’m also passionate about technology, and how advancements like the internet and mobile phone have made it possible to reach individuals living below the ultra poverty line ($1.25/day), where previously we were unable to deliver solutions due to distribution challenges.
 
Communication allows us all to be connected. With the strategic partnerships, sustainable development goals, NGOs, private capital, and the giving pledge, we are primed to change the course of humanity over the next 15 years.
 
 
Blue Ocean Global Wealth: Please provide our audience with some information on your background. How has your experience prepared you for thought leadership in the Impact Investment field?
 
Jenn: I’ve spent almost fourteen years in wealth management offices, serving multiple generations of families. Much of my work has centered on legacy planning, integrating the next generation of investors, and researching alternatives to traditional philanthropy. Over the past five years, I’ve spent a significant amount of time researching and seeking out opportunities in the impact investment scene. Having traveled to many developing countries, I’ve experienced the problems first-hand, which allows me to present new ideas to our clients and connect with those who are addressing the issues on the ground. Align is committed to providing a way for clients and their advisors to deploy more investment capital in this marketplace without sacrificing returns.
 
 
Blue Ocean Global Wealth: How do you integrate Environmental, Social and Governance (ESG) and Socially Responsible Investing (SRI) into the wealth management process?
 
Jenn: We believe that Socially Responsible Investing (SRI) and Environmental, Social, and Governance (ESG) can be integrated successfully into any core investment plan. Both of these strategies have been around for years and ESG has more than doubled in assets over the past three years to 6.7 trillion dollars. When we reference an impact lens, we include SRI and ESG in that category. You might ask why? We feel that if you’re going to divest, you should also allocate investment resources toward products that are aligned with your personal values. Align exists to serve both families and foundations directly, as well as partner with their advisors to better serve the needs of their clients. We show advisors how clients’ values can inform asset allocation and allow for the greatest possible return—socially and financially. We are not wealth managers; we partner with wealth managers and advisors, sharing our expertise in such areas as SRI, ESG, fossil fuel-free, low carbon, private fund of funds, and direct investment through private debt and equity. We are their dedicated impact partner.
 

Jenn vistis eco-friendly BanaPads, which helps ensure Ugandan girls remain in school.
 
 
Blue Ocean Global Wealth: Why should financial advisors and their clients care about integrating Impact Investing?
 
Jenn: Studies have shown that both women and Millennials (often referred to as the next generation) wish to incorporate their fundamental values into their investment strategy. Impact investing is not a passing trend; it is being embraced by beneficiaries who are set to inherit $30 to $42 trillion over the next 25 years. Studies have found that 78% of women change advisors when their spouse passes away. That number increases when the wealth is transferred to the next generation, landing somewhere between 90-98% (depending on the study). As an advisor, you want to be well-positioned to retain existing clients and gain the trust of the next generation. Until recently, impact investing was considered a differentiating factor among firms, but now advisors must to be able to respond to their clients’ investment objectives. The demand for impact investing, ESG, and SRI will only increase in the coming years as we confront the challenges of extreme poverty and climate change.
 
 
Blue Ocean Global Wealth: How does Impact Investing help advisors integrate a client’s values and achieve greater impact in their communities?
 
Jenn: It is important for an advisor to identify what matters most to their client. Maybe there is a cause they wish to advance or a fundamental issue they are not willing to compromise on (tobacco, factory farming, etc.). Advisors must be able to extract these values and incorporate them into both underlying grants and investment portfolios. By doing this, clients can make a lasting difference with their balance sheet, rather than just their charitable bucket. Those are who are passionate about education can invest in charter school bonds instead of private prisons. The same underlying financial metrics (credit, duration, and yield) come into play. You could also place a debt or equity investment in a mobile technology platform that delivers educational content to citizens who don’t normally have access to these resources.
 
 
Blue Ocean Global Wealth: What is Align? Describe how it supports Professional Advisors when serving families and foundations.
 
Jenn: Align Impact is a Registered Investment Advisor that was formed by Abacus Wealth Partners and Aspiriant , two wealth management firms that collectively manage roughly $10 billion in assets and serve over 2,000 clients. Align was created because both firms feel that impact investing and philanthropy are best handled by specialists who are passionate about impact investing and knowledgeable about the rapidly changing landscape.
 
We believe that integrating your money and values is a critical part of the wealth management process. More people are demanding that their personal, business, and foundation grants and investments are tightly aligned with their values. As trusted advisors to many of the most influential people in the world, we hope to do our part by helping our clients use their resources to solve the world’s greatest environmental and social challenges.
 
We recruit our Impact Specialists from wealth management, philanthropy consulting, investment management, and charitable organizations. While we deeply appreciate the wealth management process, we do not provide wealth management services. Instead, we work closely with your current wealth manager, or we can refer you to an impact-friendly wealth manager.
 
 
Blue Ocean Global Wealth: What is the biggest misconception about Impact Investing?
 
Jenn: The most common misconception is that only individuals with a high net worth can participate. As previously mentioned, we believe that everyone is an impact investor and that there are many options in the private and public space for both accredited and non-accredited investors. The second biggest misconception is that you have to sacrifice your return to invest this way. We believe that’s a myth and have plenty of data that suggests the contrary.
 

Jenn visists a village in Rangpur, Bangladesh and observs the BRAC lead community meeting, which empower women through micro-finance.
 
 
Blue Ocean Global Wealth: Share your passion for marrying traditional investment and wealth management stewardship with philanthropy?
 
Jenn: What we are building at Align is a company that focuses on the issues that matter most to our clients. We pair them with an optimized portfolio that maximizes returns while yielding a positive impact on their community and environment. Some people call it a double or triple bottom line, combining profits, people and the planet. We encourage you to define your own success and help you to generate the greatest possible impact on society. Last year, in the United States, individuals, corporations, and private foundations gave away $348 billion, 70% of which went to U.S. educational institutions and religious organizations. Align helps donors make strategic decisions about their giving and discover organizations that can move the needle on a global scale. There are 67 trillion dollars in investable assets globally that could be aligned for profits, people, and the planet. That’s what gets us out of bed in the morning! We want to change the conversation around money and investing.
 
Personally, what gets me out of bed in the morning is when I know that poor women in rural Bangladesh living on $1.25 or less each day have access to a better life because we transferred assets to them with no loan attached. Rather than giving them a handout, we gave them an opportunity to build their own business, quadruple or even 8x their income, which allows them access to better housing, education for their children, and sustainable healthcare.
 
 
Blue Ocean Global Wealth: You are a visionary. What is your biggest personal dream for planet earth?
 
Jenn: By leveraging the right types of capital and strategic partnerships (governments, NGOs, private capital, and corporations), we can solve poverty by 2030. This would mean that that all human beings have access to food, water, shelter, education, health, and equal opportunities.
 
 
Blue Ocean Global Wealth: When you are not revolutionizing the investment industry, what interests and hobbies do you pursue?
 
Jenn: I thought I would be doing my current work after retiring from a wealth management career. Instead, I found a way to merge my skill set with a passion that runs deep in my core. In my spare time, I love to travel. This often includes remote areas, so I can work with those at the very bottom of the pyramid. I am an avid reader, scuba diver, and lover of learning. Soul Cycle, which is an indoor spinning class that often feels like a dance party, church service, and therapy session all in 45 minutes, is my outlet for creating the biggest dreams I have for the planet. Each time I ride, I ride for two billion people that live below the poverty line, which—with the right kinds of investments—can be eradicated during our lifetime. I challenge you to find the biggest dream in your life. Dream bigger, and then take action every day.
 
 
To learn more about Impact Investing and partnering with Align, please contact:
 
Jennifer Kenning
Align: Your Impact Partner
Managing Director
429 Santa Monica Blvd. Suite 500
Santa Monica, CA 90401
424-229-6721
Jenn@alignimpact.com
www.alignimpact.com