YouSaid · the spoken record

Emanuel Citron

lines on the record: 51
first: 2020-06-18
most recent: 2020-06-18
sittings or episodes: 1
sources: podcast

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“Can I give two? The first one will be brief. The first is don't let anybody tell you what you can or can't do. You should decide that for yourself. And the second is not to envy other people's success. I think first it sets you up for a happier life. But beyond that, if you can legitimately root for other people's success and you help them take action to get there and you're never resentful about it along the way, you sincerely care that they can be successful, then I think you become a real friend to them. And lots of great things can grow from that.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“I've learned so much from my parents. They raised me. They both made their own way in the world. My dad grew up in New York and became the first doctor ever in his family and moved to Atlanta to start his own practice. My mom was born in Romania and then grew up in France and Mexico before coming to the States by herself when she was 17. I would say that they've both taught me not to live in fear. They've encouraged me and my brother to travel and explore the world. And they always gave us a lot of independence, which I think helped us learn how to learn for ourselves.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“I read a lot, I work out, I meditate and journal, but really for me, I try to spend as much time as I can with my wife and kids. That's when I really relax and recharge.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say the fashion of it sometimes, the way certain companies or personalities develop a following that separates from substance and then can tend to drift on and collect support from observers or passive market participants until all of a sudden either the emperor has no clothes or the fashion goes out of fashion. Just don't like that it departs from what's supposed to be an increasingly set of efficient market mechanisms based on fundamentals.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“But if those strategies focused on ESG, tougher for us to invest in asset managers focused on those strategies because it's, you know, the independent managers prosecuting those strategies have tough competition. We're supportive of them for sure, but tough to compete with the distribution capabilities of a BlackRock or a Fidelity. So it's no less important to us, but it's something that we address in a more specific way through the deals that we negotiate.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is, it is, and we don't mean to take it for granted. We think governance is vitally important. But in our strategy, we're more focused on private market strategies than public. And so through our investment structures, we are explicitly able to impact governance. So that can be through minority protections. It can be through overt control or through other ways that we interact with our managers. So for us, that's something that we engage with directly on a negotiated basis with the firms that we're investing in. And governance is actually, there's data that supports the idea that governance in public companies does have a meaningful positive effect on the earnings of those businesses and the way they trade. Public market strategies are a little tougher for us to invest in. We like certain hedge fund strategies, but long only strategies, which again, we believe are important and can outperform.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, it's a very interesting moment for the impact space and for ESG-oriented investors as we're dealing with the pandemic. And a lot of the ENS considerations that folks have been focused on in the space have been focused on for years are coming to the fore. Disaster preparedness and continuity planning and employee treatment through benefits like paid sick leave through the coronavirus crisis, we're seeing how important it has been to be prepared for those sort of disruptions. And going forward, we think it's going to be even more so.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are risks in investing in any space from a bigger picture perspective, you know, we worry a little bit about, as a lot of folks in the impact category do, the risk of greenwashing, the risks of confusion and complexity around the nomenclature or metrics that people use to evaluate investments in this space, that those things will turn investors off, that investors who I think are giving these strategies a chance will lose the opportunity to demonstrate that this approach, also just the underperformance of these investment strategies. So again, the idea of identifying differentiating between managers who are well intentioned but don't necessarily have the experience or haven't set their firms up to execute on differentiated investment strategies. Differentiated between those and firms that have and that are set up to create market rate returns is we think very important and is something”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Every alt strategy is competitive, and ours is no different. When people think about equity investments in asset managers, I think they tend to think about the Dials and Peters Hills of the world, which are sort of the larger cap strategies in the space. And we think those are impressive firms and their strategies are compelling, but they're very different. They're investing in different types of cash flows than we are. Ours is more growth equity-oriented. And there are other folks investing in managers in the middle market, but none that are as focused on impact and sustainability in the same way that we are. And there are firms focused on impact and sustainability and backing asset managers, but they tend to be focused on very specific themes or are in geographies that don't really overlap with ours. Probably the biggest competition, but we encourage it, is from high net worth families who, again, are focused on particular impact.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“With Aries, it's focused on established asset managers in several impact categories, but sort of opportunistic thematically. And then with Zoma, it'll be more focused on emerging managers. So folks that are newer to the space, but also looking at established managers in the categories of focus.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're an investment advisor and we're managing capital on behalf of a couple of partnerships. The first is with Ares management, who we partnered with about a year ago and has been a terrific partner, by the way, incredibly thoughtful people and have been very available to us in understanding a few sectors, in particular and out of very granular level. So that's been really good. And the second is a partnership with Zoma Capital out of Denver who are very committed, experienced investors in these categories. And that will be initially focused on workforce development, which is incredibly timely given the crisis that we're all going through in the employment sector, but also other themes, energy transition, water, community development, for example. And we have intentionally not raised a fund yet. We likely will at some point in the next six to 18 months, but we have some terrific mandates to focus on in the meantime.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“At the time, put a billion dollars of equity to work, but on a deal by deal basis. They hadn't yet raised a large commingled fund. And the two family offices that we ultimately partnered with in our investment, in our RG had partnered with them before, thought they were compelling, and wanted to support the idea of their launching a large pool of capital. And so they brought us in and asked us to meet the folks at RG who are now our partners and very good friends. And we were impressed with what we saw. These are very sophisticated investors. They had a track record of doing what they were proposing to do on a larger commingled basis. They had realized a little over a third of what they deployed, zero realized losses, high teens net returns.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Love to do that. So, our first investment was in a firm called Renewable Resources Group, COLM RRG for short. And we invested an RRG in the fall of 2018. It's RRG is a sustainable ag and water real assets manager based in Los Angeles, has been in business for almost 15 years. And when we were introduced to RRG, we had begun mapping the landscape of sustainable ag managers. It was the first category of interest to us for a number of reasons that relate to the considerations I described before. But we were explicitly introduced to RRG by two family offices that had invested with RRG before and were thinking about anchoring a commingled blind pool capital fundraise that RG was contemplating. They had”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“You bring this all home. Maybe it's best to walk all the way through one of your investments, just as an example from where you found it, how the whole, through the due diligence process and how it all played out.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that the broader LP community will appreciate these considerations again as another way to evaluate risks and identify opportunities.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Worth investors that have been very committed to impact and have helped lead the way and have helped prove the alpha generating ability of some of these investment strategies. And they're followed by a number of foundations and endowments have been allocators, a number of the public pensions have specific mandate to allocate to climate or emerging manager strategies or other impact-oriented strategies. And so there are very committed LPs to space, but you have to be a little more rifle shot in connecting particular strategies to LPs with particular interests. And our hope is that as the investors who are focused on particular strategies initially, again, prove the case and prove that you can create market rate returns. And in fact, can create alpha through some of these considerations that it will help mainstream impact to some degree.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's interesting. It's unlike the a social market in that, you know, in the asocial market, most allocators are appropriately focused initially on the risk and return profile of an investment strategy. And they want to do their diligence to understand that it's valid, that what the manager is proposing to do is something that they can execute on. But there's not a particular theme that that allocator is necessarily focused on. In the impact universe, there are allocators who are focused on particular impact themes. So some folks are more focused on, again, people, some are more focused on the planet, and obviously, you know, within those broad categories, there are subcategories that people are particularly focused on. So it's a different approach when you bring products, investment products to this market and different LP types are further along than others. There are a lot of”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think through that. We make direct introductions to LPs and consultants that we know when we think it's a good fit from both perspectives. And we also think about product development. Again, if it's a natural extension for a manager to add a credit strategy or a real asset strategy, as long as it's close to home and leverages what is differentiated about that manager already, we're happy to help think through those things and happy to help fund the launch of those sort of initiatives.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“This approach to environmental and social considerations into firm development. And then on the capital raising side, again, number of subcategories we think about the approach to marketing and investor relations and what sort of resources a firm has committed to those things, how thoughtful they are in articulating the differentiation of their investment strategy. Again, if they're focused on environmental and social considerations, how do they articulate that? Are they telling their stories effectively? And we found that a lot of managers are really good investors but aren't necessarily as practiced in telling their stories and helping connect what they do and why it's meaningful to LPs and other constituents. So we focus there. We think a lot about fundraising strategy. So, you know, depending on whether you're talking about a closed end fund or an open end fund, you'll have different approaches to that. But we help manage.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Firm development is really about implementing best practices. So understanding what others in a particular asset class or investment category are doing from a risk and compliance perspective, what are the state of the art approaches? How are firms recruiting and retaining their best personnel? What are the reporting standards and the best practices there? How are firms thinking strategically about adding products or about ways to better improve their investment strategies? And again, ENS considerations weave into all of those factors, but we think there's low hanging fruit for a lot of managers that aren't quite up the curve in that these considerations are really just another set of lenses to use to evaluate risks. Identify risks and opportunities in the material economic aspects of businesses that they're looking at. So we weave.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of the ways that we're trying to add value are very similar to the way we've experienced it in the past. And that's firm development and capital raising primarily, our two large categories. I'm happy to talk about the approaches to each of those. But the third that is different in this case is helping them think about environmental and social considerations and how they integrate those into their investment process and how they measure and report. And we think there is value to add in all three of those categories.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Touch on this, but it's the application of the values within the firm itself. So, you know, are they providing quality benefits and compensation to their employees? Do they have an inclusive culture? Are they engaging with their broader communications considerations like that?”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are they reporting? Are they forecasting expected outcomes around some of these considerations? That, again, gives us a feel for how experienced and differentiated around these considerations of manager is. And by the way, if they're very intentional, we can also help with a lot of this thinking. So there's no minimum bar necessarily that we're looking to overcome. Just to round it out, the H is their hypothesis for impact. So are they articulating what we think is a relevant thesis for addressing significant challenge? Do they consider both the negative impacts of what they”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“For their portfolio companies and how they think about those considerations at exit. So approach to ENS is the first A in alpha. The L is leadership. So what's the buy-in again from the senior management and what sort of internal and external capacity have they committed to? Have they invested in that aligns with evaluating these sort of considerations? How do they engage with their stakeholders, their LPs, their employees, the employees of their portfolio companies, the suppliers, et cetera, the entire stakeholder universe, which we think is an important part of investing and building businesses going forward, how they train their team, how their incentives are aligned. Those are some of the factors that we think about in the L. The P is presentation. So that's how they measure and report. Do they use standardized metrics or are they using metrics that they create themselves and change over time? How frequently?”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Each of the letters does represent a vertical and alpha. It helps us understand how a manager evaluates environmental and social risks throughout the investment lifecycle. It helps us measure and manage the resulting outcomes of their investments or how it helps them do that. It helps us do that as well. And then thirdly, it helps us understand how effectively they apply those same principles within the operations of their own firm. So to give you an example, the first A in alpha stands for approach to ENS, and that's the framework beneath that helps us understand how they utilize environmental and social considerations in their diligence process, how they think about evaluating risks and opportunities related to those factors during underwriting, but then throughout portfolio management, how they set goals and action plans.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Both a financial and an impact perspective is an important part of the way we think about this kind of underwriting. And then the third pillar is financial return. So again, we believe that these considerations should be accretive to investment returns. So understanding and underwriting the economic and impact alignment of a particular investment strategy is important to us as well.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Demonstrate measurable social and environmental impact. And that's important because if you can't measure it, you can't improve it. And that goes for us and for the firms we're investing in. The second is that, again, we take a holistic approach to underwriting. And from a financial perspective, as I said, it's a focus on process in addition to just focus on performance. But from an environmental and social considerations perspective, same thing. So we want to understand how a manager approaches impact. What's the level of ESG expertise on their team? How committed to these kind of considerations is the senior management team? Is their approach to environmental or social considerations differentiated just like an investment strategy has to be differentiated? What do they measure and report to their stakeholders? So that's sort of a holistic evaluation of a manager from”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is. So, yeah, each of the letters represents a particular vertical that we use to evaluate the managers. But before diving into that, maybe just as a higher level way of thinking about it, when we formulate it alpha and really the credit goes to our team and should take a minute at some point to just talk about the team, because I think it's, again, back to the idea that talent is flowing into this space. I think we have already are the beneficiaries of that and we've got folks on the team who have been really thoughtful in helping us put together this framework in particular, but who really are the best accomplishment of our firm so far. But at a high level, the approach to underwriting on the basis of environmental and social considerations is anchored for us in a few pillars that are then reflected through the alpha framework. And so the first is measurable outcomes. We're seeking to invest in asset managers and companies that”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of as a traditional private equity approach to due diligence and underwriting. And it takes place over months and it's very comprehensive. And then, of course, we also overlay our process for evaluating managers based on their orientation to impact. And we've developed a framework for doing that that's called Alpha, which is interwoven into the rest of our underwriting process. And it stands on the shoulders of giants in that it utilizes a lot of the sophisticated tools that have already been created by others in the impact space. But it enables us to evaluate asset managers and companies in certain aspects of their business as relates to environmental and social considerations.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So again, we start with underwriting cash flows. We're value investors and with a focus on asset managers, that means for us teasing out the various cash flow streams that we would be buying into. So that's management fees on funds that have already been raised and it's management fees on funds that are expected to be raised. It's depending on the asset class could be carried interest that we're forecasting owning an interest in. And that could, again, be on funds that have already been raised, maybe already raised and deployed or maybe raised but not yet deployed. And it could be on funds that are expected to be raised, depending on the structure of the deal we're contemplating. We could also be investing directly into some portion of the existing portfolios or individual companies. So we underwrite each of those items individually as well. And so we take what we think.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Track record helps obviously, but you have to take a holistic approach to that, Ted, as you know. So show me your track record. Terrific, but that's not sufficient to make an investment decision. You have to understand the process. So how do they get there? How do they source deals? How do they underwrite deals? How do they think about adding value through portfolio holds? How do they think about risk management? What's the composition of the team and how do they interact together? How do they think about optimizing value on exit? All of those sort of considerations factor into what we think of as best in class. So I don't mean to be glib in saying that. We have sort of a structured way to evaluate it, but it does boil down to what we think are the highest caliber managers in a space. Investing is a hard business and creating market rate returns is challenging. So you really have to be partnered with managers who appreciate how challenging it is, who have the experience.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“That we volary know how we're going to add value as a partner in the business. We think about structuring our investment with downside protection. And then the last and certainly not the least is that the manager actively takes social or environmental considerations into account throughout their investment process. So if we can satisfy those six criteria, we can back a manager that is more established or one that is still emerging. And we have partners, LP Capital partners, that are committing to support managers in the impact space that are both established and emerging.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Flexible around stage. What I would say is there are a handful of criteria that are very important to us. And if we can satisfy those, we can be flexible around other criteria. And so the starting points for us are that we're talking to a best-in-class manager, that they have a differentiated and repeatable investment strategy, that we're getting into business together on an aligned basis.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sourcing strategy is almost completely outbound in our part of the market. No one's really intermediating these deals. We go out and create them. And that's great. We like that. We, as I said, we map the market. We develop our thesis toward where we think it makes the most sense to deploy capital. And then we pick up the phone. So we green, yellow, red, the managers, and we reach out to the green managers when we can. We go visit them in their offices or a Zoom or video conference with them. But the idea is to engage in a dialogue. So we can learn more about them. They can learn more about us and the kind of value added partner that we like to think of ourselves as being. And then together we can decide if a path toward a mutually beneficial partnership makes sense.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Real. And if anything, I think this crisis has made clear that we need to prepare for what happens when you let natural systems get out of balance. So we're still very focused there as well. One of the strategies that we like within climate is energy efficiency. So microgrids and distributed power generation, so cleaner, cheaper, more reliable energy that's produced closer to the point of use. Those strategies, I think, will continue to both offer positive environmental impact, but also a creative proposition to the users to data centers who are looking for that kind of local reliable power, hospitals, other large scale users of power who need to transition from the traditional grid onto more efficient sources of power. So longer term, we just think the trend. Are still moving in the direction of renewables and energy efficiency.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ability to scale and have real impact. And there's a lot for us to do in real assets sustainable agriculture was our first subcategory of interest and remains a sector where we hope to do more of water is an area of interest for us. And renewable and energy efficiency assets are of real interest to us too. There's a lot of attention being focused on workforce and people. People think about impact. Often they divide the world into people and the planet. It'd be easy to push off climate right now. And there is some concern in the impact markets that the immediacy of the coronavirus crisis could cause capital that could otherwise be directed toward climate, toward other strategies. And we're hoping that capital can flow toward strategies that are investing in both. We still, you know, the climate issues that we faced before the coronavirus crisis are still very”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, one particular area that is topical given where we are in the macro environment and the devastation of the coronavirus and the significant layoffs that have happened is a mandate that we recently signed with a group called Zoma Capital in Denver, which is a terrific longstanding values-oriented investor, which is to focus on workforce development. So helping retrain upskill employees who we thought this was a very relevant category even prior to the coronavirus, but helping prepare people to retrain to meet changes in the workforce. So that's a particular area of focus right now. There are several others within private equity, healthcare and financial services present some opportunities that are very interesting to us and that we think have”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think we believe in both. So we're very intentional about impact, but we also believe that the way to have an impact and to build sustainable business is to operate within market mechanisms. And again, one of the things that initially compelled me about the field of impact investing or the consideration of social and environmental factors in investing is that it is accretive. It certainly is the way we invest. And so we're aspiring to sort of combine both of those ways of thinking.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Using those factors helps us prioritize and then deprioritize some of the asset classes and the sub themes that we're targeting.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in order to focus our prioritization, we think about a few different factors. We tend to like large categories. So if we're going to take the time to study up, we'll have multiple ways to invest. We think about cyclicality as we think about portfolio construction. So we want a mix of counter-cyclical, acyclical, and pro-cyclical strategies. We like secular tailwinds. And, you know, those can be driven by any number of factors like consumer demand or technological developments or capital flows. And then we want to understand the potential for positive impact. And that's both because we care about the impact, but also because we believe that impact is accretive to the investment theses of, you know, of our managers and of our investments. And so we want to make sure that we understand”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Spans asset classes and then within asset classes, we group managers into 27 impact categories. And then within those categories, we green, yellow, and red the managers based on what we learn about them from publicly available information, dialogues we begin to have with them, observations we take in from others. But it's an expansive map and it covers landscape from an asset class perspective, but also thematically according to impact categories.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly was for us. Yeah, so we formalized Woolry in late 2017, and we really spent the year of 2018 mapping the market. So we have so far mapped over 1,200 managers across asset classes and geographies. And the majority of those are not addressable for us as investment propositions, primarily because they're subscale or they operate in geographies that are outside of our scope. But that does leave plenty of room for us, plenty of interesting managers for us to potentially invest in.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we started with a blank sheet of paper, and I should say the first thing I did was partner with my longtime friend Danny Stein, who had collaborated with on investment thinking over time and had looked at deals with, but the stars never aligned to enable us to really formally partner together. But they did over the summer of 2017. And we formally launched that October. And again, we started with a lot to learn. We founded Volery to make private equity investments that generate positive social or environmental impact. And we quickly decided to focus on asset managers. Danny has run five businesses and ran up private equity platforms. So he's a business builder and obviously I had experience with asset managers. And given our backgrounds, we thought the idea of investing in and helping institutionalize asset managers and helping make connections between impact-oriented GPs and main”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“That and also companies with these considerations have shown to be able to reduce volatility and trade at higher multiples and access a lower cost of capital. So we think there are a lot of reasons that this is just a really thoughtful approach to investing, thoughtful additional approach to investing, that the way to have the most significant positive impact and to do it on a sustainable basis is to first do no harm or proactively think about mitigating your negative impacts. And then second, integrate environmental and social considerations into your business activities to measure positive outcomes. We think that businesses that do that are going to benefit, that it's good, it's healthy for businesses. It changes the way they behave internally and the way their customers engage with them. Creates a lot of impact along the way.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Fundamentally, we think focusing on environmental and social considerations is just a better way to invest. It's the same thing as regular investing, but it uses an extra set of filters, and that's using ESG factors to identify risks and opportunities in the material economic aspects of a business. So from our perspective, taking action on these considerations, investing dollars against them should be accretive to just give you a few examples. Companies that treat their employees well tend to have less turnover and greater productivity because they attract higher quality employees. And there's lower risk around labor supply at important points in the production process or companies that are thoughtful about it and make products with less packaging, eliminate both cost and waste. So it's considerations like”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Firms was fun for me, and it was a successful vertical for the firm for Stone Point. I love StonePoint and had a great experience there. But I had started thinking about impact a couple of years before I left. I had a lot to learn. But the more I did and after I met a couple of managers who I found very impressive that were committed to this space, the more I was compelled that investing with a focus on social and environmental considerations is first a serious discipline that's practiced by committed and talented professionals. Second, it's forward-looking and it's a powerful tool with which to address significant social and environmental issues. And third, and for me, this was the most important at the outset was that it represented a differentiated and accretive approach to investing. And so at some point, I decided that I had to commit to.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“And when I joined, StonePoint had just begun to focus on investing in asset managers. And you might recall Ted, StonePoint's first investment in an asset manager was backing Todd Combs, who's now at Berkshire Hathaway. It's a funny coincidence, but Todd and I started on the same day, me as an associate on the investment team at Stone Point, Todd, to launch Castle Point. But it was a terrific evolution for me. I joined as a generalist on the investment team and ended up focusing on the asset management vertical. And then along the way, I was also asked to start and run the marketing IR function for the firm, which was also terrific experience. And StonePoint made investments in some excellent, very differentiated asset managers. And I got to work closely with a dozen of them. And it was great. They're great people, smart, committed to their businesses and helping them grow and institutionalize their.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Got to do something with your life? Exactly right. So I got back in the beginning of 1998 and I was very fortunate. I landed a job at a firm called Beagan Group, which was a great firm. It was half M&A Advisory, half private equity. And it was a terrific initial professional experience for me. I had a lot to learn. And I had a great couple of years there, ended up leaving Beacon to help my mom take her matchmaking business online during Internet 1.0. That was a great experience, but ultimately it wasn't a career for me. And I wanted to get back to private equity. So I went back to school, got an MBA, and I joined a private equity firm called StonePoint Capital. Why don't you touch a little bit on your trajectory at Stonepoint and how that led to your shift into this space? Yeah, StonePoint was an incredible experience for me. I thought I knew and appreciated high standards and had worked with impressive.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“A unique experience in a lot of ways. It was independence. It was separation from a lot of the friends and family and support. I had known. I was with two friends and we spent the bulk of that trip actually eight months on motorcycles riding from Cape Town in South Africa to just north of Ethiopia. So we were really separated for parts of that trip from the kind of worlds that we had known. And it was an incredible experience. camped outdoors night after night and it was really all about people and the hospitable and fun and gracious people that we met along the way. And I took a lot away from that trip, including how far a dollar can go in different contexts, whether applied philanthropically or as investment capital. So I really learned a lot from that experience. And then once you get back, you hop off your motorcycle and decide you're”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source
“Annie, great to see you. Thank you, Ted. You too, always. Why don't we get started with just your background and how it led to your interest in this space? Sure. I grew up in Atlanta. It's my hometown. Love growing up there and love going back. My family is still there. And growing up, my parents were both entrepreneurs in a way. My dad was a doctor, but opened his own practice and my mom had a matchmaking business throughout my childhood. I went to college in Philly, which has become one of my adopted homes. My in-laws are there and a lot of good friends too. And then when I graduated from college, I traveled for a while, including a little over a year in Africa, in the Middle East. And that was a formative experience for me. And I think relates to some of my orientation toward what we're doing at Foolery. What was traveling in Africa like back then? For me, it was.”
2020-06-18 · Capital Allocators · Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142) · IDENTIFIED FROM THE TRANSCRIPT · source