Ron Cordes used to manage big money, about $9 billion for AssetMark. He sold that business and now big money managers turn to him for advice on impact investing. And there’s a good reason, impact investing might possibly have been the diversification strategy that saved his butt.
In 2008, his foundation had 20 percent of its portfolio in microfinance and other impact-driven debt and equity vehicles. And while mainstream investments in global banks with heavy mortgage investments took a big hit, small borrowers paid off their loans, 100 percent plus accrued interest.
That was his wake-up call, ‘Here’s a totally uncorrelated asset class that in the worst financial crisis in my lifetime was the only thing I had invested in that was immune to the crisis.’”
Today, around 40% of the Cordes Foundation’s approx. $11 million in assets is in impact investments, names like MicroVest Holdings, Bridge International Academies, and Sarona Asset Management.
And what about returns? On the equity side, he’s expecting returns of 10-12 percent. “But I frankly think I’m going to be pleasantly surprised on the upside,” he says.
Photo licensed under Creative Commons from jdhancock on flickr