For the broader field of impact investment, family offices are perceived to be increasingly important actors in the space. They have the ability to set their own investment targets, they are potentially more nimble than institutional investors in their decision-making systems, and impending wealth transfer to Next Gens within families is anticipated to favor a shift of assets towards impact investing.
In the coming decades, the rising generation of high net worth families will inherit an estimated US$41 trillion from the current or retiring generation.[i] Studies have shown that Next Gens, understood as family members between age 25 and 40, often have more progressive value systems than previous generations and are more interested and drawn to the value proposition behind impact investing strategies. However, they struggle with a number of obstacles, including: familiarity with the range of impact investing options, perceptions of financial underperformance, concerns over greenwashing, limited peer-to-peer collaboration, differing generational perspectives on the role of investment, lack of specialist advisors, and entrenched conventional investment approaches. As a result, only four percent of Next Gen family members consider themselves fully-active participants spending “a great deal” of time engaged in impact investing, although the majority (60 percent) of Next Gens consider it “important” to use their family’s wealth to make a positive social or environmental impact.[ii]
The IRI’s Impact Investing for the Next Generation program is an applied research program that directly engages Next Gen cohorts to explore the role of family offices in impact investing. Through two workshops and a six-month period of individual and group work, participants develop leadership and engagement skills, gain access to a conceptual frameworks, a body of knowledge about and real world examples of impact investing in practice, conduct a due diligence field exercise, explore the creation of impact investing strategies and policies, and in sum develop a solid foundation for Next Gens to build support for, and then implement, impact investing within a family business and family office context.
The program is convened by the IRI and is developed in collaboration with the World Economic Forum, along with emerging leaders within family offices and industry experts. Participants are supported by a community of like-minded Next Gens, faculty, advisors and experts who share their expertise during and after the program.
For more information, please email firstname.lastname@example.org.
IRI Next Gen Program Team
Dr. David Wood
Dr. James Gifford
Dr. Falko Paetzold
[i] Boston College Social Welfare Research Institute (2003): https://www.bc.edu/content/dam/files/research_sites/cwp/pdf/41trillionreview.pdf
[ii] Morgan Stanley Private Wealth Management & Campden Wealth (2014): http://www.campdenresearch.com/content/next-generation-wealth-report-2014