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Family offices to gain from G7 impact investing proposals

As one of the fastest growing groups of impact investors, family offices will benefit from the recommendations of a G7 taskforce seeking to unleash the sector’s $1 trillion potential.

Led by Sir Ronald Cohen, the taskforce, launched last year, has established guidelines for governments and the financial sector to grow impact investing, the practice of creating measureable social and environmental good through investment.

Among the its eight recommendations, the taskforce said: social impact bonds and development impact bonds need further development, regulatory and tax incentives should be expanded to enable investors to offset their impact investment income against tax, senior government ministers need to champion the practice, and pension schemes should be encouraged to buy impact products.

The report, compiled by experts from the G7, as well as the European Union and Australia, was launched at Downing Street in London, in September.

Leading impact investing families include the Brenninkmeijers, behind budget Dutch clothing retailer C&A. Former family business member Stephen Brenninkmeijer stepped out on his own in 2007 to launch an impact investing fund Willow Investments.

In the US, the Kleissners were awarded the BNP Paribas Grand Prix philanthropy award this year for their commitment to the practice. The couple is on track to have a 100% impact investing portfolio by the end of the year.

Luther Ragin Jr of the Global Impact Investing Network says family offices have become one of the fastest growing market segments in the field in recent years, something they track in their annual survey of the world’s top impact investors.

Ragin says best practice guidelines for measuring impact, already published by the taskforce, will be of particular interest to family offices.

While this is a recommendation that will have immediate consequence, others will take longer to implement. “The policy work around clarifying fiduciary responsibilities is going to take a little while longer,” Ragin says.

Speaking on the report’s launch, Cohen said: “This is not about increasing or reducing public expenditure, but helping government to benefit from innovation and private sector capital in order to achieve more impact with the money it has.”

Other notable private investors involved with impact investing include the Case family, who made their wealth in AOL, Ebay founder Pierre Omidyar, and Liesel Pritzker Simmons, a member of the family behind Hyatt hotels.

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