Single Family Offices as a vehicle for wealthy families to perform Impact Investing and Responsible Investments
Many wealthy families use their wealth to give something back to society. They donate to charitable organisations, organise charity events or even set up their own foundations. This is especially true for families who have secured and built up their wealth over many generations. Interestingly, in some cases such families also use their own Single Family Office to make social investments. Two particularly relevant terms in this context are Impact Investing and Responsible Investment. As part of our research into the largest European family offices, we have determined the investment focus of the investment companies. In this context, we also looked at the sustainable investment of single family offices. In this article, we would like to present some initial quantitative evaluations of this by looking at the proportion of family offices in Europe that are engaged in impact investing or responsible investments and summarising a few other findings.
Statistics: Share of single family offices in Europe with social investment strategy
Some of the richest families have established foundations to become philanthropically active. But also some of the hidden single family offices are used to do good. Even though the proportion is relatively small, 2% of the family offices in our database publicly state that they make impact investing or responsible investments. Interestingly, the proportion of UK family offices is exceptionally high, while we did not identify any single family office that highlights its social investments in some other countries (e.g. Switzerland and France). Most of the companies on our list use social and sustainable investments as one of many investment strategies. This means, for example, that they invest in real estate and private equity and also focus on social projects in Africa. We have only identified one European Single Family Office that exclusively operates Impact Investing. It is important to mention here that some Single Family Offices do not indicate in which areas they are active. In these cases it is of course also possible that Impact Investing and Responsible Investments are made.
What does impact investing and responsible investment look like from the perspective of single family offices?
There are different ways to effectively conduct impact investing. Particularly popular is the promotion of start-ups and young companies dedicated to a specific social or environmental problem. Such start-ups are often active in developing countries and work on concrete challenges. But there are also companies in Europe that are committed to helping the socially disadvantaged. Another way to conduct impact investing is the targeted support of certain foundations. In particular, if the HNWI have not established their own foundation, the money is distributed to those that have a particularly sustainable effect. It is therefore worthwhile to approach single family offices directly in order to support one’s own social projects. This also applies to those who have not attracted much attention in the past with sustainable investments, because this topic is becoming more and more important.
Picture Source: Christian Joudrey
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