Ron Cordes Introduces the Global Impact 50 Index
You have to have a lot of energy to keep up with Ron Cordes. I met him last week in midtown Manhattan as he was preparing his presentation for the Clinton Global Initiative (CGI), the global philanthropic organization, founded by President Bill Clinton, that brings together governments, businesses and nonprofit organizations to seek answers to the world’s most pressing problems.
Oh, so you thought he was just a leading financial executive? Well, he is—Ron, along with Brian O’Toole and Richard Steiny, founded AssetMark, a fee-based asset management platform that the trio subsequently sold to Genworth Financial. But wait, there’s more. Along with his job as co-chairman of Genworth Financial Wealth Management, Ron has founded the Cordes Family Foundation, which is sponsoring social entrepreneurship around the world. Ron’s name for his foundation’s focus is Impact Investing: he’s not merely giving money away, he’s investing in businesses that will lift people out of poverty—by their own efforts. Make no mistake; Ron is very actively involved. You have read about his adventures, and his principles, in several issues of Financial Planning. (See Making an Impact, Impact Investing, and Good Deeds, Done Well)
CGI members are required to commit to a project every year. Ron’s project this year combines his AssetMark expertise with his passionate support of social entrepreneurship: He has teamed up with the Calvert Foundation, the Rockefeller Foundation and Giving Assets, a donor advised fund to create the Global Impact 50 Index, a ranking of the top 50 impact investment fund managers based on social and environmental value as well as financial returns. It’s a challenge that excites him for several reasons. “This project came out of my frustration that there is no database to vet social venture fund managers in a full-fledged way,” Ron says. “So much of this industry is anecdotal.”
Most funds today that do impact investing, whether they’re microfinance organizations or venture capital, are small and fairly new. There are few public audited long-term track records to consider, and the qualitative elements of these funds’ performance have not yet been benchmarked. As a result, it’s hard for a financial advisor to compare funds and make an objective recommendation to a client who wants to get involved in philanthropy. So the Global Impact 50 Index is an ambitious project.
“We’re recruiting panelists now to review data,” Ron says. “You have to have transparency and objectivity. The Index will include 50 organizations. Someone’s going to be number 51 and we’ll have to be able to explain why.”
Of course, there’s a bigger picture. Ron’s ultimate goal is to create an AssetMark-like platform for financial advisors who are looking to help clients invest in social entrepreneurship. “Right now, it’s tough for an advisor to incorporate impact investing into a portfolio,” he says. “How much do you allocate, how do you diversify, how to you evaluate performance?” Although he readily admits that the payoff for impact investing is quite different than traditional investing, Ron believes that many high-net-worth investors would happily devote a portion of their assets if they had a reliable way to learn about and evaluate the various vehicles. If his platform succeeds, more advisors will be confident incorporating their clients’ social goals with their financial ones. Stay tuned.