Ep. 13 - How to serve a diverse set of clients and advisors through strong data, and comprehensive manager due diligence - ft. Fabian Willskytt, Associate Director at Align Impact

Revalue is a values-driven investment firm founded in 2013 by Angela Barbash, an experienced investment advisor with over 20 years of service. The firm's mission is to assist individuals in aligning their finances with their values by divesting from the extractive economy and investing in the regenerative economy.

Revalue focuses on providing investment options in the public markets that support impact-oriented communities and organizations. They work closely with clients to identify their desired impacts and narrow down their investment preferences, including the type of organizations, investment structures, and specific impact areas such as community development, renewable energy, or local businesses.

Taking a partnership approach, Revalue offers proactive due diligence on investment opportunities. They maintain a data room where clients can access information on funds, community investment funds, and other vetted investments. Additionally, Revalue encourages clients to scout for direct investments in their communities, such as local businesses or projects. The firm provides guidance and support in evaluating these opportunities to ensure they align with the client's investment policy statement and risk tolerance.

Revalue's approach to values-driven investing goes beyond traditional financial metrics. They prioritize qualitative factors and impact metrics, allowing clients to invest in line with their values and contribute to the transition from the extractive economy to the regenerative economy.

With a team of eight employee-owners, Revalue has experienced significant growth and serves a diverse client community, including accredited high net worth investors, institutional investors, and non-accredited wealth builders. Over the past decade, they have educated thousands of individuals, and currently have nearly 200 clients in their community.

Revalue's success in aligning finances with values has inspired other advisors in the industry. To support this growing interest, Revalue recommends starting with a small group of highly motivated clients to beta test their approach and gain valuable experience. They also emphasize the importance of joining peer-to-peer learning communities within the industry to share due diligence efforts and learn from one another.

In conclusion, Revalue is a pioneering values-driven investment firm that assists clients in aligning their finances with their values. Through a partnership approach, they help clients divest from the extractive economy and invest in the regenerative economy. By prioritizing impact metrics and qualitative factors, Revalue enables clients to make investments that reflect their values and contribute to positive change in their communities.

Revalue assists clients in divesting from public markets and investing in impact-oriented opportunities in the private community markets. They believe in aligning clients' finances with their values and helping them make a positive impact through their investments.

When clients express interest in divestment and reinvestment into regenerative finance and the local economy, Revalue starts by assessing their risk tolerance and building an investment policy statement (IPS). The IPS helps identify the appropriate percentage of the portfolio that can be allocated to impact investments, ensuring clients are comfortable with the level of risk involved.

Revalue offers two tracks for clients to explore. Some clients already have knowledge about divestment and impact investing and come to Revalue specifically for their expertise in these areas. Others may have personal finance questions and needs and are looking for a values-aligned advisor. For the latter group, the concept of divestment may be new, and Revalue educates them on the possibilities and benefits.

The next step is to narrow down the scope of the impact investments based on the clients' preferences. Revalue helps clients target the specific impacts they want to have, such as investing in solar energy or supporting local food systems. This process helps clients navigate the vast array of offerings in the private markets and makes it more manageable.

Revalue has a partnership approach with their clients. They proactively look for investment opportunities like community investment funds and CDFI notes, which they include in their data rooms for clients to review. On the other hand, clients are encouraged to be scouts for direct investments, such as local businesses or projects in their communities. Revalue provides guidance and due diligence support to ensure that these investments align with the clients' IPS parameters.

Revalue's approach to impact investing in the private community markets differs from the traditional focus on quarterly earnings and benchmarking against the S&P 500. They take a more qualitative approach, considering the broader impacts and outcomes of the investments. This approach allows clients to make investments that align with their values and contribute to the transition from an extractive economy to a regenerative one.

For advisors interested in incorporating impact-oriented opportunities in the private community markets, Revalue suggests starting with a beta group of highly motivated clients. This group can help test the process and provide valuable feedback. Revalue also recommends joining peer-to-peer learning communities like Rad Planners or attending conferences like ESG for Impact to connect with other advisors and share due diligence efforts.

Overall, Revalue's mission is to assist clients in divesting from public markets and investing in impact-oriented opportunities in the private community markets. They believe in the power of aligning finances with values and are dedicated to helping clients make a positive impact through their investments.

Revalue, as highlighted in the podcast episode, places great emphasis on assessing clients' risk tolerance and developing an investment policy statement (IPS) to guide their impact investments. This approach ensures that clients' values and financial goals are aligned and that their investments are tailored to their specific needs.

When clients express interest in divesting and investing in impact-oriented communities, Revalue begins by assessing their risk tolerance. This assessment goes beyond just their financial ability to take risks and also considers their emotional risk tolerance. By understanding clients' risk tolerance, Revalue can determine the appropriate allocation of their portfolio towards impact investments.

The next step in the process is the development of an investment policy statement. This statement outlines the percentage of the overall portfolio that is suitable for impact investments and sets the direction for the client's investment strategy. In some cases, the IPS may also serve as a destination point, outlining the desired composition of the portfolio in the future.

Revalue recognizes that impact investments in the private markets can be overwhelming due to the diverse range of offerings and the lack of organization in this space. To address this, Revalue takes a partnership approach with its clients. They proactively search for investment opportunities such as community investment funds and CDFI notes, which they then make available to their clients. On the other hand, clients are encouraged to act as scouts for direct investments, such as local businesses or projects in their communities. Revalue provides guidance and due diligence support to clients as they explore these opportunities.

Throughout the process, Revalue acknowledges that knowledge and savviness about investing are not determined by wealth or income. They approach each client with an open mind, recognizing that clients may come from diverse backgrounds and levels of financial literacy. Education and a learning journey are key components of Revalue's approach, ensuring that clients have a solid understanding of impact investing and are empowered to make informed decisions.

Overall, Revalue's emphasis on assessing risk tolerance and developing an investment policy statement reflects their commitment to aligning clients' values with their financial goals. By tailoring impact investments to each client's unique needs and providing ongoing support and education, Revalue aims to empower clients to make meaningful and impactful investment choices.

Welcome to the latest episode of "Your Stake, Your Story," in this episode we welcomed Bill Davis, the founder of Stance Capital. With our co-founder and host, Gabe Rissman, the discussion navigates through Bill's unique career path, which spans from the direct mail industry to renewable energy, ultimately leading to his groundbreaking work in applying complex data models to ESG investing. His expertise sheds light on the intricate dynamics of the ESG landscape, and the challenges and triumphs in aligning investment strategies while finding ways to incorporate values without compromise into the portfolio-building process.

"You can't scale an industry if you're offering concessionary returns. It was sort of like you're not going to maybe make as much as you otherwise would, but you're going to sleep a lot better at night. But if you really want to scale it, you have to prove that it's free. So that has always been what we have been trying to prove.” - Bill Davis

This episode also delves into Bill’s strategic innovations in developing new investment products that synergize the benefits of both private and public market investing. The conversation encompasses the pivotal role of major corporations in global decarbonization efforts and the influential impact of public markets in fostering sustainable investment practices. Furthermore, Mr. Davis discusses his unique approach to ESG data analysis in building out material risk factors in his strategies.

Key Points of the Episode:

• Finding the thread of Bill’s Career Path from the direct mail business to Stance Capital and discussing the through line between.
• Data-Driven Decision Making: Learn about Davis's approach to leveraging data across different sectors, emphasizing his innovative methods in informed decision-making within ESG investing.
• The Role of using both Private and Public market investing as tools to generate impact for clients.
• He shares his thesis for starting Stance Capital and how that’s changed over time and how the ESG conversation has shifted in the last few years.

Watch the full video: https://youtu.be/ktwmH1JzEpM

About Stance Capital

Stance Capital specializes in quantitative ESG (Environmental, Social, Governance) asset management and research. They are a Boston-based Registered Investment Advisor, and their clients are individuals, families, endowments, and institutions. They also build products for other investment firms under research and sub-advisory agreements.

Stance Capital took a critical evaluation of the ESG industry and found three key flaws that we aim to solve:

1. Ethical Consistency: Aligning capital with client values is generally not being done in a thoughtful or consistent manner
2. Value for fees: Many PMs are NOT adequately active for the level of fees they generate
3. Risk Management: Risk efficiency is arguably a large source of out-performance that is not properly implemented

Given the rise of disclosure of ESG metrics Stance can take advantage of advances in big data, distributed cloud computing, machine learning, and artificial intelligence to help their clients achieve their investment objectives. They have built a fully data-driven and systematic approach to Investing that gives quantifiable impact and performance metrics for their clients.

About Bill Davis:

Bill Davis is Founder & Portfolio Manager at Stance Capital. Prior to forming Stance Capital, LLC, Mr. Davis was co-founder and Managing Director of Empirical Asset Management, and Portfolio Manager on EAM Sustainable Equity, a strategy he launched in 2014. Prior to co-founding Empirical, he was the founder and CEO of Ze-gen, a venture and private equity backed renewable energy company. Mr. Davis received a B.A. from Connecticut College, and his career in business has included serving as CEO or founder of numerous companies including: Database Marketing Corporation in 1986, Holland Mark in 1997, and Cambridge Brand Analytics in 2003. He is Vice Chair of Impact Infrastructure, LLC, and serves on not-for-profit boards of Ceres and Seven Hills Global Outreach. He is a founding member of the President’s Council of Ceres. Mr. Davis has taught at Columbia University Center for Environmental Research and Conservation, and guest lectured at Harvard College, Harvard Business School, MIT, MIT/Sloan, Vanderbilt, and Boston University. Mr. Davis holds a Series 65.

To learn more about Bill Davis and Stance Capital:

Bill Davis LinkedIn

Stance Capital

Stance Performance

Hennessy Stance ESG ETF

[00:01:05] Priorities shift during pandemic. 

[00:04:11] Children's book on financial education.

[00:08:10] Values as a big deal. 

[00:11:36] Emotional safety in investing. 

[00:17:56] ESG and financial performance. 

[00:19:59] Values based investing future.

[00:01:28] System Change Investing.

 [00:03:53] Economic and political systems.

 [00:07:27] System Change Investing.

[00:14:19] Corporate Support for Climate Policy. 

[00:17:32] Financial Advisors and System Change. 

[00:22:16] Using capital markets for sustainability.

[00:02:31] Financial advisors and tobacco-free. [00:04:35] Tobacco's unsustainable impact. [00:08:42] Youth and tobacco industry marketing. [00:13:21] Harmful effects of smoking. [00:17:48] Tobacco-free finance pledge. [00:22:20] ESG ratings for tobacco companies. [00:26:31] Tobacco-free investing.

In this episode of Your Stake Your Story, we are joined by Maureen Maguire, CFP, AIF, and Vanessa Jilot, CFP, CRPC, the founders of Terra Blue Wealth Management, an ESG-only wealth management firm. 

Together they discuss how they met and founded Terra Blue, how they look at ESG investing, the role of activism and politics in investing, and share their experiences serving clients across wide generation gaps to accomplish the same goal: protect the planet, and have a strong financial future.

In this episode, Gabe, Vanessa, and Maureen discuss:

• How Maureen and Vanessa tackle ESG investing with different generations of clients
• How social justice and activism are core to their work
• Debunking the ESG performance myth
• How values-based investing is emerging as a component of their practice

About YourStake Your Story:

The YourStake, YourStory podcast is designed to amplify voices in the financial industry who are leading the charge for socially responsible investing practices.

Each episode, we are joined by experts in the field to hear their stories about what brought them into the industry, why they are passionate about ESG and values-based investing, and much more.

Resources:

Terra Blue Asset Management

Maureen Maguire, CFP, AIF LinkedIn

Vanessa Jilot, CFP, CRPC LinkedIn

YourStake

YourStake, YourStory Podcast Home

When Marco Vangelisti first started in finance, he was part of a Quant Team using performance analysis tools and optimization packages for Wall Street portfolio managers. 

Soon after, Marco managed investment equity portfolios on behalf of large foundations and endowments focused and was part of a $20 Billion emerging market equities, long-only, strategy that had the best 10-year track record at the time, and outperformed their index by 13%. His model worked, and the team delivered fantastic returns to his clients, including environmental foundations.

However, as time went on and Marco explored the stocks behind the portfolio, he saw an emerging trend that didn’t sit right with him. While some stocks delivered high performance, it was mainly derived from the destruction of animal habitats and the natural world. 

When he had a conversation with the CIO of an environmental foundation and shared that the palm oil company delivered the high returns had in fact destroyed a habit of Orangutans, the CIOs response was that he was focused on the investment side of the foundation and his task was to protect the assets, not the planet.

That was a wake-up call for Marco where he felt there was something fundamentally wrong with the way finance works and led him to shift gears, divest from stocks that created harm, and start the slow money movement.

Since leaving his portfolio management life behind in 2009, Marco set out on a mission to be a 100% aware and no-harm investor with a longstanding commitment to Positive and Restorative investing. He is a founding member of the Slow Money movement  and is on the leadership team of Slow Money Northern California since 2020.

In this episode, Marco and Gabe discuss:

• Marco’s awakening moment of being part of a highly successful Quant team to understanding the trade-off of high returns to the environmental impact at the time.
• The complexity of ESG investing and the shift to no-harm investing, and restorative investing.
• Explain and explore unaware, reduced risk, no harm, positive, and restorative investing styles.
• Why transparency into investments is key to understanding how they bring about change and positive impact.
• How consumer change is easier at the product level versus portfolio change, but tackling investments is more impactful
• The future of no harm and positive investing in the near and far future, and why there is a massive transformation coming.

About YourStake Your Story:

The YourStake, YourStory podcast is designed to amplify voices in the financial industry who are leading the charge for socially responsible investing practices.

In each episode, we are joined by experts in the field to hear their stories about what brought them into the industry, why they are passionate about ESG and values-based investing, and much more.

Resources and Links Mentioned in the Episode:

EK4T's website: https://ek4t.com/

EK4T’s investment classification course: https://ek4t.com/classification/

The upcoming MQU course: https://www.mqre.org/events/2023-towards-aware-and-values-centered-investing/

CNote: https://www.mycnote.com/

RSF Social Finance: https://rsfsocialfinance.org/

To learn more about us:

YourStake

YourStake, YourStory Podcast Home

Elysabeth Alfano, CEO of VegTech, is the fund manager and advisor to the world’s only plant-based ETF, EATV. She is driven and passionate about addressing climate change in a matter of years not decades. Often, many reports say we have till 2050, but she argues that we need to look at 2030 as the date we need new systems in plate to reap the existential rewards by 2050. 

While many issues related to climate change like renewable energy and green transportation are imperative to a healthier planet, looking at how agriculture contributes 14.5% of the world’s greenhouse gas emissions, according to the United Nations is an area many aren’t considering and this sector is ripe for disruption. 

Listen to Elizabeth and Gabe discuss this hidden mega-trend that can help create a meaningful impact on our planet and learn about how our agriculture industry connects to food security, the global supply chain, public health, and animal welfare.

In this episode, Elysabeth and Gabe discuss:

• The growing issue of how to create more food in a shorter amount of time while causing less damage to our planet
• How raising 80 billion animals affects issues of land management and our own health.
• How alternative proteins are created and why using fermentation and fungi creates massive amounts of proteins with low resource use.
• How to bring planet-based innovation into client portfolios and how to talk about its impact on the environment

Beekeeping also created an opportunity for clients of his to shift investments into ESG funds, every year, Jon would give each client a small jar of his honey, and there sparks a curiosity around how the honey was made, sharing ideas on how bees connect to the environment, societies and even governance bring clients to say, “I like this idea and I didn’t think I could put money into issues that I care about, so how can I make this work?”

For many clients, starting a conversation around do they want ESG is not an impactful lens to apply for investing, but having conversations framed around what they cared about and what they were interested in was far more impactful and helpful in guiding investment decisions with their portfolio. In fact, Jon’s alignment of values with portfolios allowed them to enhance and reinforce what clients already were doing. 

With the massive growth in data around ESG investing, he’s able to find investments that align with his clients' values. Jon explains it as “If there’s a certain bank and they’re not doing the governance the way we like it, maybe they’re opening fake accounts or behaving in fraudulent ways, I can search for 50 other banks, and all we have to do is look at the data and find out if one of them is equal in their performance, but smarter in the way that their culture works and their governance.” Jon finds himself helping to create personalized portfolios with his clients by leaning on good ESG data and a strong understanding of what his clients find most important to their investment alignment.

Listen to the full episode, as Jon and Gabe discuss:

• Prospecting new clients using a small jar of homemade honey
• Building better conversations around ESG investing by talking about client’s gardens and how they’re looking for new steps to engage with bettering the world
• Using ESG data to find investment opportunities without the need to compromise on returns
• Understanding client preferences and thresholds for company actions and how to utilize tools to build the right portfolio for them

About YourStake Your Story:

YourStake aims to provide advisors with everything they need to understand ESG issues, analyze portfolios, and report to clients. We want to equip you with the underlying data and analysis tools to navigate ESG. The YourStake, YourStory podcast is designed to amplify voices in the financial industry who are leading the charge for socially responsible investing practices.

Each episode, we are joined by experts in the field to hear their stories about what brought them into the industry, why they are passionate about ESG and values-based investing, and much more.

Resources:

• YourStake Website
• YourStake, YourStory Podcast Home
• BankCherokee
• Jon Kvasnik LinkedIn