Creating Financial Markets: Lessons from Finance Pioneer Ron D. Cordes

Creating Financial Markets: Lessons from Finance Pioneer Ron D. Cordes

It was in 2004, on his 45th birthday, when Ron D. Cordes decided that by the time he turned 50 he would be on a different path. He had run AssetMark, the company he founded, since soon after his graduation from the University of California at Berkeley.  By 2006, Ron and his partners sold AssetMark to Genworth Financial Management, and he used the proceeds to start a family foundation that would be dedicated to social enterprise and impact investing.
 
On January 26, 2012, we had the pleasure of hearing Ron tell us his story about the lessons he has learned in “infrastructure building” in the investment services business and how he plans to apply this expertise to impact investing.
 
Ron’s new venture – ImpactAssets – is a non-profit financial services company that aims to aggregate and deploy capital in sustainable social enterprises. The goals of ImpactAssets are to:

  • Leverage investments to earn a return and create positive social and environmental impact
  • Increase the amount of capital flowing to high impact social and environmental enterprises
  • Speed the adoption of impact investing by investors, philanthropists and their wealth advisors

 
This is a bold initiative that is providing a “circle of capital” around these social and environmental enterprises to help them solve the major problems of the world.  During his speech, Ron drew this image to illustrate his point:
 

 
On the investment capital side of the equation, Ron has already moved the needle by developing a public database (ImpactAssets 50) that identifies experienced private debt and equity impact investment fund managers.  He is also launching debt and equity products that will soon be available to the masses through financial advisors. Now Ron seeks to understand and tap the human capital side of the equation. How can we promote our best and brightest to seek social enterprise?
 
Unfortunately, it’s rare that someone who has been as successful in the private sector as Ron Cordes decides to put their full energy, capital and resources into solving social issues. But Ron is doing just that – and expanding that group by providing economic opportunities to hundreds or even thousands of people who are seeking ways to make a difference.
 
His theory?  Countless people have a financial advisor, but few have access to the type of social impact investment products like those that Ron and ImpactAssets are creating. Think about it: your long-term investments like your 401K or IRA accounts are invested in a basket of products that may or not be making money for you, but that capital is certainly not being put to work.  If you had the chance to put your money to work solving a social issue – while generating a return – would you pass up that opportunity?
 
Ron is building an infrastructure for impact investing similar to the one he helped build in financial services. ImpactAssets aims to be the resource to engage financial advisors to offer impact investing products to their clients.
 
As Ron said, “where the goal of AssetMark was to beat competitors, ImpactAssets is mercilessly focused on doing the best for the world.” How can you be the best for the world?
 

Interested to learn more?  Watch Ron’s entire talk here:

 
Original post at Duke CASE