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EXCLUSIVE: Putting Personal Values Into Investing - Debates From The WealthBriefing London Summit

Tom Burroughes, Group Editor , London, 15 June 2015


The recent WealthBriefing Summit in London held a discussion around what are sometimes called "investments of passion" and the debate highlighted the breadth of issues involved.

What sort of innovations would Carruthers like to see in such investing?

Carruthers said he would like to see more index-tracking and low-cost impact-based products in the sustainability space. There are relatively few of these at the moment, he said. Carruthers talked about the attractions of the Social Investment Tax Relief as a “cost-effective incentive to enter the social impact investing space”.

Another development, he said, is the recent guidance issued by the Law Society on how charitable objectives can be fitted into investment goals as part of a broader set of fiduciary duties. “That will begin to have a significant effect,” he said. 

It’s personal
Chereau, partner, J Stern & Co, was asked to sketch how people’s passions and philosophies should shape their investments. “At J Stern & Co, passions and philosophy have been combined in our values: we invest in real assets for the long term using a clear, simple and transparent investment process. We focus on the quality and value of those assets and are able to do so thanks to our in-house fundamental research. Beside this, we also believe that some niche investment opportunities, still in real assets, can be integrated within investors’ allocation, including passion investments. For example, J Stern has developed a capability in sports finance which can fall into the passion category for some clients,” Chereau said.

Chereau was also asked about the trade-off between passion investing, risk and return. He replied:  “Hopefully you can have your cake and eat it.” The sport funding strategy we mentioned satisfies both the passion angle as well as providing investors with very attractive non-correlated returns. There is this perception in the market that personalised investments with philanthropic or ethical bias suffer lower returns. It is not always the case and largely depends on the managers or the project selection.

“Investments in niche strategies with real assets backing, like art, collectors’ cars and wines have yielded good returns over the long term. The key here is the simplicity and transparency of the structure and process used. In this game, you can have the best of both worlds,” he added.

Making movies, making returns
Bell, from Goldfinch EIS & SEIS Investments and Nyman Libson Paul, said that she and her colleagues have been “inundated with projects from the film industry”.

One trend is that some investors, keen on films and also attracted by the tax reliefs of enterprise investment schemes and similar structures, imagine that they have found the “Holy Grail” of an investment, she said. However, Bell cautioned that the tax efficiency of such structures should not be the dominant focus – the same underlying business case remained the most important driver.

Asked about how such “passion investments” appealed to certain age groups, Bell said that seed EIS and other structures were an effective way to draw in interest from the younger generation of investors.


(Other conference sessions from this event will be published here in the coming days.)

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