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Officer Nick Wilde, as Quoted in Disney's movie Zootopia
Privos Capital 2019: Millennial Led Impact Investing
Baby boomers, the richest generation in history, are aging and preparing to pass down a record-breaking amount of assets. Privos estimates that millennials stand to inherit $30 trillion from their predecessors, a phenomenon that has been dubbed “the great wealth transfer in world history.”
At Privos Capital, it has been our experience that millennial family office investors have expressed a strong desire for impact investing, along with strong commitment to philanthropy. The young are big hope. Having grown up in a digital age, millennials are both more exposed to the world’s woes, and more likely to use electronic investment tools. This generational change is already visible at universities. Under pressure from alumni, several endowments have promised to clean up their investment portfolios. Business schools say classes related to ESG investment are oversubscribed.
The millennial generation within our family office partners are suspicious of financial institutions. They also believe they can change the world. According to a survey in America by Morgan Stanley, 75% agreed that their investments could influence climate change, compared with 58% of the overall population. Millennials are also twice as likely as investors in general to check product packaging or invest in companies that espouse social or environmental objectives. And, like children of every generation, they influence their parents. Millennials tend to balk at off-the-shelf products. They want to express individual values.
According to Morgan Stanley, Gen Z enters the workforce on firmer financial footing than Millennials, with a stronger job market and college costs that are less burdensome. In addition, Gen Z’s aspirations seem to align with the labor market’s opportunities. This cohort sees technology and health care as the most desirable industries to work in, and, in fact, both sectors are expected to be growth drivers for jobs in the coming decades. No surprise, the survey also found Gen Z to be far more tech-savvy than its predecessors, with 60% saying they have used a smartphone before the age of 14. It also found no generational divide between Millennials and Gen Z, with both groups sharing broadly similar views on education and values. “We interpret this positively as it implies that, alongside the continuous support to population growth, there will be no fundamental generational gap as Millennials relinquish their dominance to Gen Z.
Bloomberg reports that Millennials were the catalyst in the move towards impact investing. OverTwo-thirds of family offices surveyed agreed that families with children born after 1980 would see an increase in requests to participate in impact investing. Nearly half of family offices (47 percent) believe that impact investing is a more efficient use of funds to achieve social impact than philanthropy.” Almost a third of family offices are either somewhat or highly active in impact investing and a further 30 percent said that while they were not currently active, this was likely to change in the future.
Boarding and Prep Schools For Family Offices
We are often asked to weigh in on the appropriate boarding school or universities for the children of our family office partners. Millennials from our family offices attend the most elite US prep school and global boarding schools which include: Exeter, Andover, Groton, Choate, Lawrenceville, Deerfield, Milton, NMH, Hotchkiss, and St. Paul's, as well as Eton and Harrow (UK), Le Rosey (France), Queen's College (South Africa), Ecole des Roches (France), Geelong Grammar School (Australia), Upper Canada, and Appleby (Canada). So, if you or your family are interested in learning about our views and the application process for the various US and international boarding and prep schools, we would be happy to share our experiences with you. We do not offer prep school or college advisory services, but we are happy to discuss our favorite colleges, universities, grad school, and universities with you and share our collective experiences as alums, if that is helpful. If you have no interest in boarding school, but you would like to learn about college or graduate schools, we are here to be helpful to you and your family office.