Builders Vision, the investment and philanthropy platform of billionaire Lukas Walton, has shifted its $1 billion endowment to what it calls “impact investing,” sparking a broader shift in family offices to connect their investing and giving.
Chicago-based Builders Vision will announce today that the Builders Initiative Foundation has shifted 90% of its endowment to “mission-related” investments – investments aligned with Builders̵[ads1]7; broader goals of sustainability and equity. Most foundations have 20% or less of funds in ESG or impact investing, so the 90% level sets a new standard for family offices and foundations.
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“If we’re going to make lasting change happen, we need our mission to show in everything we do — especially in how we invest our resources,” said Lukas Walton, the grandson of Walmart founder Sam Walton. “That’s why we invest our endowment in companies, organizations and strategies that prioritize sustainable and fair solutions.”
(PRO subscribers can watch an exclusive interview with Walton about this news and his overall investment strategy here.)
Walton, 36, is at the forefront of a rapid generational shift in family offices, as heirs and entrepreneurs in their 30s and 40s use their wealth to drive social change. For decades, family offices have shared their philanthropy and investments—making money on one side and giving it away on the other. The new generation wants their investments to pursue the same solutions they provide, combining “profit with purpose.”
“We believe that profit and purpose are not at odds, quite the opposite,” said Matt Knott, Builders Vision’s president and COO and former PepsiCo executive. “Purpose-driven businesses will be competitively distributed going forward. The brands and companies that people feel good about will have a competitive advantage.”
Billions for social change
Although ESG investing faces backlash and criticism of “greenwashing”, the rise of impact investing among family offices is accelerating. A Credit Suisse survey of family offices found that almost half of family offices surveyed plan to increase their sustainable investments over the next 2-3 years. As more family wealth is passed down to younger generations, and more tech wealth is created by young founders, family offices are pouring billions into startups, stocks and private equity aimed at social change.
“This next generation is unstoppable,” said James Gifford, head of Sustainable and Impact Advisory and Thought Leadership at Credit Suisse. “They bring out the best of free markets and social innovation.”
Adds Knott, Builders Vision president: “This new generation of family offices wants to make an impact, they want to make a difference with the wealth they inherit.”
Builders Vision, which has more than $4 billion in assets, includes a direct investment division, asset management unit and philanthropy. All are aimed at three main issues: food, ocean health and energy transition. Builders Vision has assembled teams of in-house experts to fund the ideas with the greatest impact and share them across the philanthropy, startup and investment worlds. The Builder’s Initiative Foundation is part of the philanthropic arm of Builders Vision, which has multiple funds and capital pools, each with its own goals and investment missions.
Philanthropy, says Walton, cannot solve the world’s biggest problems, even with government help. The major technological innovations needed in energy, agriculture and the environment are likely to come from entrepreneurs. At the same time, many impact-related startups are too risky for traditional venture capital firms and angel investors. Walton and his team say Builders Vision and other large family offices are uniquely positioned to fund companies and nonprofits across the risk spectrum.
NGO for stock exchange listing
“We want to provide the capital solution from NGO to IPO,” said Sanjeev Krishnan, chief investment officer at S2G Ventures, Builders Vision venture capital fund.
For example, the ocean team at the Builders Initiative used an LLC to invest in a small startup called Matter, a UK-based company developing technology solutions for capturing, harvesting and recycling microplastics. As it grew, it became an attractive venture capital investment, leading Builders’ VC arm, S2G, to invest seven figures recently.
S2G, with about $2 billion in capital, has funded 80 companies and was an early investor in SweetGreen and Beyond Meat. The portfolio includes everything from Farmer Focus, which works with family farms to grow organic chicken, to Common Energy, which funds community solar projects.
While Krishnan declined to provide specific returns, S2G ranks in the top quartile of VC firms, according to Cambridge Associates benchmarks.
With a 90% endowment shift to mission-related investments, even the Builders Initiative Foundation endowment—which funds the philanthropy—is now focused on positive social and environmental impact. Noelle Laing, chief investment officer at Builders Initiative, said the real return target remains 5% net of fees, which is standard for endowments.
“We believe you can achieve market returns while integrating ESG factors and integrating an impact lens into our strategies,” Laing said. “We think it’s just smarter to invest.”