The Hahn family\u2019s wealth, which originated in manufacturing four generations ago, is today overseen by Wilson, the current family patriarch, and supported by a family office staff of two investment professionals. The family members themselves have minimal investment experience.<\/p>\n
CLIENT BRIEF<\/strong><\/p>\n The family\u2019s assets were invested across four portfolios\u2014one for the parents, one each for the two children, and one for the family foundation\u2014and the respective \u201cowners\u201d had differing investment preferences, especially as related to Sustainable and Impact Investing (SII).[1]<\/a> Given the family\u2019s stature within its industry, investment opportunities often were presented to them, but many were not of institutional quality. Assessing them thoroughly was challenging for the family\u2019s investment staff, a process made even more difficult by the varying portfolio interests of each family member.<\/p>\n One of the sons, Charlie, and his wife, Anne, were especially interested in incorporating SII into their portfolio. Charlie had previously met Melissa Jones, an investment director within Cambridge Associates\u2019 (CA\u2019s) SII team, and reached out to her to learn more about the firm\u2019s capabilities.<\/p>\n CLIENT NEEDS <\/strong><\/p>\n While Charlie and Anne\u2019s environmental and social interests were the catalyst, the other family members joined the initial conversations with CA, as they recognized that their diverse needs were straining the resources of their family office.<\/p>\n Collectively, the family sought:<\/p>\n SOLUTION<\/strong><\/p>\n Melissa introduced the Hahn family and the family office to Jane, an investment director within CA\u2019s Private Client Practice, so that, in addition to SII expertise, the family\u2019s investment team included family investing experience. In discovery conversations with the Hahn family, Jane and her team learned about each family member\u2019s goals. These input sessions included a full Family Enterprise Review, which enabled the CA team to gain a complete sense of the key issues that would inform investment policy setting and, later, implementation. This included reviewing the family financial ecosystem, long-term goals and intentions, spending needs and cash flow patterns, return objectives, risk and volatility guidelines, and tax and legal considerations.[2]<\/a><\/p>\n For the portfolios where SII would be incorporated, these intake sessions also included asking about each portfolio owner\u2019s purpose, priorities, and principles\u2014the \u201cthree Ps\u201d CA employs to help define the why, what, and how of each investor\u2019s unique SII portfolio. With Charlie and Anne, for example, this involved learning about their motivations, the values they wanted to advance through their investments, and their risk appetite and return objectives. Through these discussions, Charlie and Anne expressed their principle of avoiding investments that \u201charmed the world,\u201d outlined their specific views on areas such as pharmaceuticals, animal testing, and sustainability, and expressed their return expectations. CA used this valuable input to formulate the couple\u2019s investment strategy and policy framework and, subsequently, to identify specific investment opportunities. The parents, their second son, Brian, and the collective family on behalf of the foundation experienced a similar discovery process with CA. The family was impressed by CA\u2019s Global Investment Research team\u2014including its dedicated SII team of more than 12 professionals and its private investing team of more than 100 professionals\u2014and the quality and depth of their manager due-diligence capabilities.<\/p>\n Following the discovery process, it was decided that Charlie and Anne\u2019s portfolio, as well as that of the family foundation, would be managed as fully integrated SII portfolios. The parents\u2019 portfolio would instead adopt an \u201copportunistic\u201d approach of incorporating SII allocations when they appeared the most attractive, creating a hybrid portfolio within their non-SII portfolio. As Brian did not feel strongly about SII, he retained a diversified portfolio that intentionally did not incorporate SII.[3]<\/a><\/p>\n\n
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