Grégoire MOUHICA, Déc. 2024
Proceedings Impact Finance - Philanthropy, Investment and Blended Finance Geneva Forum 2024
As a representative of the wealth management industry, particularly the family office segment, my role is to help clients align their wealth with their values, especially regarding sustainability and impact.
The first step involves establishing a detailed ESG profile for each client — a regulatory requirement in France.
This process assesses the client’s sensitivity to sustainability challenges from several angles: sectoral, geographical, social, and environmental. Once this profile is defined, it provides a comprehensive view of how much importance the client places on these issues. This allows us to determine the types of projects they wish to support and the proportion of their portfolio that will be allocated toward environmental and social goals.
It also enables us to design a sustainable allocation strategy over various time horizons — 1, 3, 5, or 10 years.
In terms of investment themes, this process typically incorporates sector exclusions, controversy analysis (including reputational risk assessments), EU Taxonomy alignment, and SFDR (Sustainable Finance Disclosure Regulation) compliance.
After assessing client preferences, we move to the investment universe. A wide range of vehicles are available, including ESG funds, direct investments, and club deals that aggregate impact projects. More sophisticated financial structuring can also be designed to direct capital toward impactful initiatives.
The sourcing of opportunities is diverse and can be direct or intermediated:
- Direct investments: via business angel networks.
- Venture Capital funds: through co-investments alongside VC managers.
- Private Equity funds: similarly through co-investment opportunities.
- Private banks: providing access to curated co-investments.
- Crowdfunding platforms: increasingly functioning as digitalized marketplaces for impact projects.
The investment process involves two key analytical stages:
1) Initial Screening: This is both macro and micro:
- Macro: sector, geography, market dynamics, economic cycles, and megatrends.
- Micro: the DNA of the management team, governance structures, operational setup, and team capabilities.
This screening aims to match curated opportunities with client profiles. Should a client express interest, we then facilitate direct interactions with project teams or fund managers for deeper due diligence.
2) Advanced Due Diligence:
- When co-investing alongside a General Partner, or in direct investments, this stage becomes highly technical, operational, and pragmatic.
- It involves classical due diligence, detailed assessments of operational risks, scrutiny of the project’s lifecycle reporting, and a critical review of ESG practices.
- Where necessary, we propose improvements based on industry best practices and conduct ESG research if the opportunity involves a fund structure.
Once all analyses are concluded and the project aligns with the client’s values and objectives — we proceed to the investment.