Impact investment: The collaboration teaching super rich kids to do good
What is one to do with yourself if you’re young, ambitious and stinking rich?
The answer may be easier for some than for others. Many may assume anyone who fits into this category doesn’t have a care in the world and is happily living life, unencumbered by the worldly worries that proliferate society.
But they would be wrong.
There was a time when these so-called Next Gen – the children of rich families set to inherit fortunes – would be most associated with blowing their money on parties, designer clothes and holidays. But the new crop of trust fund kids are making efforts to ensure they don’t live up to the stereotype.
There is a small but growing demographic of uber-wealthy millennials who want to make their inheritance work for the greater good – while also making more.
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. Studies have shown that Next Gens, understood as family members between age 25 and 40, often have more progressive value systems than previous generations.
Understanding how to make that happen, however, is not quite as straightforward as throwing money at the problem. In a market in which few wealth managers are recommending giving money away, sound advice can be hard to come by.
That’s where one course run by Harvard University and the University of Zurich, in collaboration with the World Economic Forum, can help.
“Impact Investing for the Next Generation” is a little-known course that operates for the one percent in our society but, rather than just teach finance, teaches that exclusive group how to make a lasting societal impact.
According to the Annual Impact Investor Survey, impact investing refers to investments “made into companies, organisations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.”
This isn’t a course you will see advertised in the brochures for higher education. According to Bloomberg, the course has barely been advertised since it was launched in 2015. Instead, it is spread by word of mouth among wealthy families and old-money networks.
“It gets the scions of the world’s wealthiest families together to talk about impact investing, and I don’t know a lot of programs like that,” course alumni Antonis Schwarz told Bloomberg.
“People go in not knowing much about the impact space and they come out as impact champions.”
Even if an eager student should happen to stumble across the application page, acceptance on the course will set them back US$12,000 for a week of classes in both the US and Switzerland, according to Bloomberg. All travel costs and board are on top of that.
Harvard calls the course an “applied research program that directly engages Next Gen cohorts to explore the role of family offices in impact investing.”
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.
They count among their ranks some of the biggest families in business, including grandson of Hyundai Group’s founder, Chung Kyungsun, and Schwarz, who became a millionaire at 16-years-old after the drug company his great-grandfather founded was sold for a whopping EUR4.4 billion (US$5 billion).
In a world with such staggering inequality, at least this is a start.