Company Profiles

Legatum Eyes New Frontiers For Impact, Entrepreneurship

Tom Burroughes Group Editor London 23 January 2024

Legatum Eyes New Frontiers For Impact, Entrepreneurship

Philanthropy and impact aren't "nice-to-haves" for this firm but the main event – in fact the reason behind much of its partners' investment thinking. This publication recently sat down to get an idea of its governing philosophy.

A private investment partnership founded in 2006, investing in philanthropic causes, is eager to spread the news on how it is mixing impact and philanthropy.

The mission statement of Dubai-based Legatum is: “We invest our ideas, energy and capital into companies, initiatives and people we believe will shape the future for the better.”

While some high net worth and ultra-HNW individuals donate part of their wealth to philanthropy as a “side-dish,” in addition to a main course, Legatum’s raison d'etre is driven by using investment outcomes to support useful projects.

“We want to help other people and we only invest our own money,” Mark Stoleson, CEO of Legatum, told this news service in a recent meeting. 

Stoleson, along with his three partners Alan McCormick, Christopher Chandler, and Philip Vassiliou, established Legatum in 2006. Today, the ownership of Legatum is evenly distributed among them, reflecting an equal partnership split. Stoleson  previously worked as a corporate finance and M&A attorney with Akin Gump in Dallas, Texas, and Moscow. The financal strength of the four partners allows them to embark on projects which they care about. In total, Legatum employs 50 people. 

Stoleson's ambition – common to those building tech companies, for example – is to “scale up” philanthropic ventures, pointing to efforts such as de-worming programmes in Burundi and Rwanda, and stamping out slavery and people trafficking. To that end, Stoleson says that Legatum often collaborates with others to achieve this all-important scale – for example, working with the Bill & Melinda Gates Foundation and the UBS Optimus Foundation. Most recently Legatum allocated $10 million, alongside the Tsar Family, to the newly-launched UBS SDG initiative – an impact bond vehicle. 

“The key here is that these aren’t vanity projects,” he said. 

Legatum is a multibillion-dollar investment company which invests its own proprietary capital across a concentrated portfolio of 10 or so investment ideas. It then uses the profits to fund various philanthropic causes. 

Its main investments are in education, entrepreneurship, health, personal freedom; policy and civil society, and urgent response (relating to rapid aid in the event of natural/human-caused disasters). In the UK, Legatum has invested in the new GB News channel - a centre-right TV platform that has not been free of controversy. 

Legatum has co-founded initiatives such as the END Fund, the Freedom Fund, and the Luminos Fund. 

Stoleson said that he and his Legatum colleagues have been looking at the problem of orphans who are placed in institutions in certain countries, even though they have relatives who they could live with. In Africa, there are vested interests in preventing families from adopting children. By working with local frontline organisations, Legatum has helped lobby for changes in adoption and foster law in Kenya. This is an example of the improvements the organisation wants to make, he said. 

Part of the secret sauce of Legatum, so to speak, is that it is able to involve itself in club deals to fund projects and take away financial risks from larger, more constrained and less risk-tolerant donors. For example, WeCyclers in Nigeria wants to work with Unilever to collect plastic waste from the environment. Should specific outcomes be achieved, Unilever would pay WeCyclers but not upfront. Legatum would then put the initial risk capital upfront to fund the project and, if the agreed outcomes were achieved, Legatum would get its money back. This is an example of blending the kind of financial savvy that’s familiar in the City or Wall Street with projects helping people expriencing difficult economic conditions. 

The collaborative model that Legatum appears to embody may not be unique, but it is among the pioneers which the organisation seems to be taking to a new level. 

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