Business

Billionaire Lucas Walton Family Office Fans Influence Investment Push

Builders Vision, billionaire Lucas Walton’s investment and philanthropic platform, has shifted its $1 billion donations to what it calls “impact investing,” leading to a broader shift in family offices to link their investments and donations.

Chicago-based Builders Vision will announce today that its Builders Initiative has committed 90% of its donations to “mission-related” investments—investments in alignment with Builder’s broader sustainability and equity goals. Most foundations put 20% or less of their donations into ESG or impact investments, so the 90% level sets a new benchmark for family offices and foundations.

“If we’re going to make sustainable change, we need to have our mission manifest in everything we do, especially how we invest our resources,” said Lucas Walton, grandson of Walmart founder Sam Walton. “That’s why we invest our resources in companies, organizations and strategies that prioritize sustainable and fair solutions.”

(PRO subscribers can watch an exclusive interview with Walton about this news and his overall investment strategy. here.)

Walton, 36, is at the forefront of a generational shift in family offices as heirs and entrepreneurs in their 30s and 40s use their fortunes to drive social change. For decades, family offices have divided their philanthropy and investments: on the one hand, they earn money, and on the other, they give away. The new generation wants their investments to pursue the same solutions as their donations, combining “profit with purpose”.

“We believe profit and purpose are not in conflict, but quite the opposite,” said Matt Knott, president and chief operating officer of Builders Vision and a former PepsiCo chief executive. “A purpose-driven business will have a competitive edge in the future. Brands and companies that people treat well will have a competitive advantage.”

Billions for social change

While ESG investing is facing backlash and greenwashing criticism, the growth of impact investing among family offices is accelerating. A study of family offices by Credit Suisse found that almost half of the family offices surveyed plan to increase their sustainable investment over the next 2-3 years. As more family wealth is passed on to younger generations and young founders create more technological wealth, family offices are pouring billions into start-ups, equities and private investments focused on social change.

“The next generation is unstoppable,” said James Gifford, head of sustainability and impact consulting and leadership at Credit Suisse. “They bring out the best in the free market and social innovation.”

Knott, president of Builders Vision, adds, “This new generation of family offices wants to make an impact, they want to make a difference with the wealth they have inherited.”

With assets in excess of $4 billion, Builders Vision includes a private equity division, an asset management division and a philanthropic organization. They all address three core issues: food, ocean health, and energy transfer. Builders Vision has assembled teams of in-house experts to fund the most effective ideas and share them with charities, startups and investors. The Builder’s Initiative Foundation is part of the Builders Vision philanthropic arm, which has several funds and capital pools, each with its own goals and investment missions.

Philanthropy, says Walton, cannot solve the world’s biggest problems, even with government help. The major technological innovations needed in energy, agriculture and the environment are likely to come from entrepreneurs. At the same time, many influencer startups are too risky for traditional venture capital firms and business angels. Walton and his team say Builders Vision and other large family offices are uniquely positioned to fund companies and nonprofits across the risk spectrum.

NGO to IPO

“We want to provide a capital solution from NGO to IPO,” said Sanjeev Krishnan, chief investment officer of S2G Ventures, Builders Vision venture fund.

For example, the Oceans team at the Builders Initiative used an LLC to invest in a small start-up called Matter, a UK-based company developing technical solutions to capture, collect and recycle microplastics. As it has grown, it has become an attractive venture capital investment, with the Builders’ venture arm, S2G, recently investing seven figures.

S2G, with about $2 billion in capital, has funded 80 companies and was an early investor in SweetGreen and Beyond Meat. His portfolio includes everything from Farmer Focus, which partners with family farms to raise organic chickens, to Common Energy, which funds community solar projects.

While Krishnan declined to provide specific returns, S2G is in the top quartile of venture capital firms, according to Cambridge Associates benchmarks.

With 90% of donations moving to mission-related investments, even the Builders Initiative Foundation, which funds philanthropy, is now focused on positive social and environmental impact. Noelle Lang, chief investment officer of the Builders Initiative, said the real return target is still 5% net of fees, which is the standard for donations.

“We think you can achieve market rates of return by integrating ESG factors and integrating an impact lens into our strategies,” Laing said. “We think it’s just a smarter investment.”


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