Impact Investor Opens Doors for Others to Follow

Ron Cordes, vice chairman of Genworth Financial Wealth Management and co-founder of ImpactAssets

SecondAct.com has a nice piece by reporter David Ferrell on Ron Cordes, a successful financial services entrepreneur who in his encore career is creating pioneering products to make impact investing opportunities more widely available.

Indeed, Cordes’s two passions these days are impact investing and encore careers themselves — that is, opportunities to leverage financial capital and human capital to tackle global challenges.

Cordes is a co-founder and board member of of ImpactAssets, a nonprofit financial services firm that is creating “fund of funds” products that financial advisors can offer to their wealth-management clients The first two, expected to be launched this year, will be in Microfinance and Global Sustainable Agriculture. He’s also working with Civic Ventures to provide financial advisors tools to help their clients move into their own encore careers (disclosure: I share Cordes’ enthusiasm for encore careers and am a vice president at Civic Ventures).

As Ferrell writes, Cordes and his wife got interested in impact investing after the 2006 sale of AssetMark Investment Services to Genworth for $230 million. Cordes and his wife, Marty, used some of the proceeds to establish the Cordes Foundation. Ferrell picks up the tale:

The Cordes Foundation adopted the strategy because the traditional investment approach just wasn’t accomplishing enough, Cordes says. None of the foundation’s core wealth was helping anyone in need. Only the annual earnings from that wealth — a comparatively puny slice of the pie — was going to worthy causes.

“We were frustrated by the fact that the 5, 6 or 7 percent a year that we gave away was dwarfed by the other 95 percent that was being invested,” he says. “I started looking at that and saying, ‘Why can’t we have a similar impact with the other 95 percent?’”

In 2007, Cordes persuaded his board of directors to shift one-fifth of the foundation’s wealth into impact investments. A good share of it, he says, was parceled out as micro-loans to businesses in developing countries. The cash helped to rev up burgeoning markets, and shopkeepers generally made good on repaying the loans. The strong return from the impact investments bolstered the foundation’s ability to give away other donations, Cordes says.

“That 20 percent,” he says of the impact investments, “actually out-performed everything else in our portfolio.”

The triumph set a clear direction for both the foundation — which doubled its commitment to impact investing — and for Cordes, who has emerged as one of the concept’s most vocal advocates, a self-proclaimed “pro bono evangelist” for the cause. Cordes aims the pitch at more than just charitable institutions. His target is anyone with money to invest, from the managers of giant pension funds to work-a-day wage-earners.

Cordes told Ferrell he’s having more fun catalyzing capital to make a difference for others even than building his own financial empire. “I would say this is the most meaningful and satisfying thing I’ve ever done.”