Why VC should be part of any family office impact portfolio
As the next generation of family offices begins to take over, the lines between impact and VC are becoming increasingly blurred and that means there are even more meaningful ways for family offices to do good with their money.

What you need to know

  • Family offices have a history of putting their money towards causes that they care about, usually via philanthropic activities.
  • However, as a new generation of family members takes the reins of these investing and philanthropic activities, the boundaries between positive impact and returns are gradually merging.
  • ESG or impact, investing is a huge trend across the asset management sector, which usually sees firms combining doing good with ensuring sizeable returns. Family offices have followed suit by showing interest in sustainable investments.
  • Despite all this positivity behind impact investing, it has hit a wave of controversy in recent years, with accusations of firms engaging in greenwashing and in some cases, even diverting funds away from initiatives that can make a real difference.
  • Family offices must think carefully before jumping into ESG and impact head-first and examine other ways they can do something more meaningful with their money, as there are numerous ways to bring about positive change that don’t necessarily have the ESG label.
  • Venture capital is an important case in point, as the sector has long been making a positive impact in its own right, and should be part of any family office impact portfolio.
Impact Published on Simple September 22, 2021

Family offices have a history of putting their money towards causes that they care about, usually via philanthropic activities managed through a separate arm to their for-profit investments. But as a new generation of family members takes the reins of these investing and giving activities, the boundaries between positive impact and venture capital returns are gradually merging.

ESG (environmental, social, governance), or impact, investing is a huge trend across the asset management sector, with firms competing to show how they can combine doing good with delivering outsized returns. And family offices have been following suit, with research by UBS showing that almost two thirds (62%) of families regard sustainable investing as important for their legacies and three quarters (73%) are already investing at least some assets sustainably.

But despite the positive sentiment behind impact investing, it has hit a wave of controversy in recent years and might not be the ‘silver bullet’ that it initially seems. A lack of standards and a desire by many firms to cash in mean the sector is increasingly facing charges of ‘greenwashing’ and, at its most extreme, of inadvertently funnelling funds away from initiatives that really make a difference. This is the argument made by the former sustainable investing chief at Blackrock, Tariq Fancy, who recently called ESG investing a “dangerous placebo”.

About the Authors

Kjartan Rist

Kjartan Rist

Venture capital investing

Kjartan is a Founding Partner of Concentric, the London & Copenhagen-based venture capital firm. He helps family offices gain a better understanding of VC investments and how to allocate towards this.

Connect with Kjartan Rist

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