Entrepreneurs who are spearheading a company with long term potential may want to consider Chat Reynders' thoughts on social responsibility. Reynders, CEO of Reynders, McVeigh Capital Management, is a Socially Responsible Investor (SRI). He directs his firm's capital towards areas where he'd like to see change and make an impact, and he is normally looking at a five to seven year time frame. "As opposed to five to seven days, the way people invest these days," he says.
Entrepreneurs complain that even venture capital and private equity investors are in a hurry, looking for their exits. But there may be an investor class emerging where there is a convergence of interests with technology, social impact, and the longer term.
"Fiduciary investing--for capital preservation and growth through varied market cycles--and social investing are intertwined," he says. "They are both about holding assets for the long term."
Socially responsible investing has evolved over time. Initially asset managers would avoid certain types of investing, such as in weapons manufacturers, or tobacco companies, or companies with a weak human rights record. Now investors direct their capital proactively where they hope to make a difference.
Chat Reynders is passionate about technology. He likes to direct capital at projects making change through disruptive technologies. 3D printing is a great example: printing prototypes or parts easily and close to where they need to be shipped eliminates waste and transportation costs, including to the environment. Not to mention the positive changes 3D printing can potentially bring in biotech, with artificial body parts.
Other technologies to invest in can be found in healthcare and chemicals. The cost of sequencing the human genome is coming down, opening up exciting new areas of research. Enzymes are being used instead of chemicals for certain processes, such as transforming agricultural waste into ethanol. And even factory automation is an area to watch, as it advances to eliminate emissions.
Reynders studies community living and is always looking ahead. "If a company's management is switching from an old practice of using chemicals that pollute the river, and focusing on cleanup and lawyers' fees, to deciding to use enzymes instead, they are reducing long-term liabilities. The highest fiduciary standards should be applied to the community, to employees, and to the planet."
These types of investments don't sound like typical ones for a retirement portfolio, but Reynders says where there is a sound balance sheet, that's exactly what they are. "How you really make money is through compounding returns. We look for disruptive technologies with strong thematics, where clear signals point to markets developing and growing over the long term," he says. "Our job is about holding great assets, that can be a backstop that would hold even in a financial downturn."
Reynders envisions a future that is more locally-based and more socially-conscious, but driven by the best that technology and a global information network have to offer. And as someone directing capital this way and that, he can help shape that future. "There is a new chapter coming in social investing," he says.