Bringing the Future to Investors

Tony Arnerich makes a practice of investing in companies that have a positive impact. Kaplan Tony Arnerich makes a practice of investing in companies that have a positive impact.

Brand Story - With its third white paper on the topic and award-winning research, Arnerich Massena is redefining “impact investing,” offering investors the opportunity to make a positive global impact with the potential to achieve.

 Ten years ago, Tony Arnerich couldn’t sleep.
 
Arnerich is chief executive officer and co-chief investment officer at Arnerich Massena, an investment advisory firm based in Portland. As a grandfather of six, he began to question seriously where the world was heading. Exponential population increase, water shortages, air-borne illnesses, skyrocketing energy prices, and inadequate access to healthcare, had him searching for viable solutions.

IMG 9130

To ease his concerns, he began looking at the market sectors that would be most impacted by an exponentially growing global population – food, water, energy, and healthcare. In 2008, he and his team constructed a portfolio based around those sectors, along with a corresponding white paper outlining the opportunity.

With these in hand, Arnerich and co-CIO Bryan Shipley toured major American cities—“shouting from the rooftops,” as they said—about the need to invest in socially and environmentally responsible companies.

This is known today as “impact investing,” which essentially is investing in companies that positively impact the world while earning a return for investors.

Yet few listened.

IMG 9151Arnerich Massena’s Art Nouveau tower, a historical Portland landmark.

“There was an issue with language. Too many buzzwords like green, sustainable, socially responsible, and ESG (environmental, social, governance) confused people and gave the impression that it was not a profitable venture. The overall perception was, ‘this is philanthropy,’ which at that time meant ‘underperformance,’” said Arnerich. “In the investment world, when you see something nobody else sees, it can be lonely and requires patience. But to us, that is the essence of opportunity.”

So Arnerich and his team went to work. Over the next 10 years, they focused their research efforts on finding impact-related opportunities across five major asset classes—fixed income, private equity, global stocks, hedge funds, and private real estate.

Impact investing focuses on companies that are committed to generating social and/or environmental impact, along with financial return. In the past, the genre had been associated with “charity.” Yet an increasing awareness and a new generation of investors has created a greater demand for companies that can solve global issues. With greater access to disruptive technologies, far more companies exist now than a decade ago that can address the world’s needs.

Arnerich Massena began by funding water managers and acquiring water and farm-related assets. They invested several hundred million dollars into global equity focused on sustainability. They even co-sponsored a hedge fund to create more investment solutions.

“We were fully committed,” said Arnerich, “and were determined to get it right.”

IMG 8837(L to R) Ryland Moore, Investment Advisor & Director of Business Development; Tony Arnerich, CEO & Co-CIO; Bryan P. Shipley, CFA, CAIA, Co-CIO.

And now they’ve got it right. The result: A fully-defined, multi-asset class portfolio in the impact investing genre, meeting the rigor required by institutional investors and available to all investors.

“We don’t have the luxury of underperformance here,” said Arnerich. “We have a fiduciary responsibility to make money for our clients. And for the first time, we have a portfolio which allows us to do that, as well as make a positive difference.”

”Investors want to get behind businesses that can grow and make a positive difference,” said Ryland Moore, director of business development and investment advisor at Arnerich Massena. “Generation X and millennials have different views than baby boomers on how to effect change. And as these younger generations acquire more wealth, they’ll be deploying capital to companies aimed at solving these global issues.”

In other words, “doing good for society” and “doing well financially” have finally caught up with each other.

For example, Fishpeople, a Portland-based certified B Corporation revolutionizing the seafood industry through relentless transparency and product innovation, has quadrupled its sales since 2015, with products now in more than 5,000 stores. Zero Mass Water, whose solar panels create drinkable water from the air’s humidity, is now in commercialization and working to change the way the world gets clean water.

According to Shipley, these two companies are just the tip of the iceberg. “We’ve uncovered some really exciting opportunities for investors in this space.”

IMG 8897Arnerich Massena’s analytical team.

“Philanthropy on its own will not solve the world’s problems, there’s too much demand and need,” added Moore. “We need investment in markets, we need businesses both public and private. The science is there, the technology is there, and now, with this generational transfer of wealth, the capital is getting there.”

And while his firm’s intentions seem altruistic, Arnerich makes it clear: His work is to earn clients profitable returns. “Our value is measurable—and in addition, allows clients to connect to what’s important to them,” he said. As such, the investment firm produces a quarterly report to show clients how their portfolios are performing, and will provide new metrics to measure impact. “Our reputation in the industry is for great research. We’ve been doing this for 30 years. And now, we’re taking the sum of that energy and our knowledge and we’re going to make major inroads.”

“It is better than possible,” Arnerich added. “It’s doable and it’s now.”

Even with promising steps taken, Arnerich still worries about the future. New technologies can always bear unintended consequences, and global problems seem to spring up continuously. While their impact portfolio offers an opportunity for change, Arnerich acknowledges it’s just the first step in a long process. ”We’re the early adopters,” he declares, “we recognize that, and we’re excited to be leading this charge.”

Arnerich Massena’s impact investment portfolio is now available for investors. The corresponding white paper is available via http://arnerichmassena.com. Contact the firm to learn more.

 


Brand stories are paid content articles that allow Oregon Business advertisers to share news about their organizations and engage with readers on business and public policy issues.  The stories are produced in house by the Oregon Business marketing department. For more information, contact associate publisher Courtney Kutzman.

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.