Danny Almagor didn’t start out in the world of finance, he was an engineer, he wanted to be an astronaut! But as with most things with Danny, he wanted to take action, so when he finished uni he and some friends launched Engineers Without Borders.
This became a clear trait in Danny’s personality, and a theme for his businesses. He wanted to make a difference in the world, and he wanted to go big.
He’d eventually meet and marry Berry Liberman, and with their energy and wealth combined, they were eager to deploy their investments to make a positive impact in the world. They weren’t satisfied with the philanthropic status-quo, of investing into a black-box of assets and then committing a portion of the returns to charity.
They wanted to cut out the middle man, they wanted to build, and invest in, businesses that were making a positive impact from the outset. And along the way, to catalyse a new vision for business and economics.
Today, we recognise this as impact investing, but when Danny was getting started, that word didn’t exist. They launched Small Giants and then Impact Investment Group (IIG), and they played a pioneering role in spreading the word on this new approach to investing.
But in 2020, the world changed, and Danny recognised it was an opportunity to pivot and evolve himself and his business.
The result, is a new impact investment firm, it’s called Sentient.
Genesis of an Impact Investor
Danny’s Grandparents were holocaust survivors. He recognises the influence that had on his understanding of concepts around racism and disadvantage, and it left him with the distinct realisation that there was work to be done.
“I came to this epiphany about my own agency, the fact that the world will be made by the decisions each of us make in the world. I realised I’ve got to step up, I’ve got to make some decisions. And now, I feel like I’ve lived my life like that ever since, if I see something that needs to be done, I’ll try and step in and do it, if I can.” Danny explained.
“That led me to creating engineers or borders, I also started another company with a friend, called Medi Vax. I just felt it was all about action, you see something, and then you see what you can do to make a difference on that.”
While Engineers Without Borders was a non-profit, they worked with major engineering firms and investors. They were receiving funding to do good work, but at the same time Danny recognised that these companies were involved in things that weren’t so good, like building coal fired power stations and fossil fuel projects. He wanted to go deeper, he wanted to make change at the source.
“The ultimate shift is actually changing the way the economy works, the way businesses do their business.” Danny says.
Early Days of Impact Investing
Going against the grain is never easy. Danny and Berry had a vision, but as they spoke to the leading wealth management firms, none could offer them the pioneering approach they were looking for. So they built it themselves.
“It just didn’t make sense to people. And so we created Small Giants to resolve that problem for ourselves. And after about four years, we started having a lot of other people ask us that same question, like, where do you find the deals? And how do you do this? And, who can help us? That was the point that we realised that we needed to start building the ecosystem beyond just ourselves.” Danny says.
“We’re always supporting others doing work. But the idea of a place that would create opportunities for investment, that’s how IIG started. It was basically the idea of a shop where people can come and find impact investments.”
The impact investment space was still nascent at this stage, and a lot of the work involved bringing people along on the journey.
“The essence of that next part of the journey was asking, can it work? Can you invest, aligned with your values and make a return, and IIG in those years 2013 to 2020, was really about proving that it can work.” Danny says.
2020 Changed Everything
We all felt it, 2020 was a wake-up call about what we take for granted. It was a shift in perspective, and in the zeitgeist. Industries like hospitality and travel were decimated, while others boomed.
For Danny, it was tough. A building deal fell through, and his father passed-away. He felt it, but as usual, he took action.
“I looked at it in the context of what was happening to the world, and to so many other businesses, which is massive uncertainty. But also an opportunity to really ask; Who are we and what do we want to be? And hopefully, a lot of people who are listening to this are asking that on a personal level, but those who run businesses should be asking it on their business level, did the world change in 2020?” Danny opines.
“And I think it wasn’t just the pandemic for Australia, we had the fires of 2019/2020, the worst fires in our known history. So we had a profound experience that changed the world. We started asking the question, what is the essence? What is the question for now going forwards? And I think from impact investing’s perspective, if the first one was what is impact investing? The second one was, is it real? Can it work? Can it deliver what it’s promising? I think the answer to that is yes.”
Taking it to the mainstream, with Sentient
In hard times, it’s often easy to regress to the status-quo, but Danny did the opposite. He doubled-down on his commitment to impact, declaring that this was the time to show people the power of linking your values with your investments.
He brought together a team of financial professionals who’ve shifted their focus to impact, and launched a new impact firm.
“The question is, how do we accelerate this shift of impact to the mainstream? And that’s really, I think, the question that we’ve been asking over the last year, through these difficult times, rather than saying, okay they’re difficult, what do we do? Maybe this is an opportunity to reframe what we’ve tried to do here. And the reframe on the other side of this pandemic, I think, is that the world is ready for this to be the way we invest.” Danny says.
“So our answer was a new organisation, it’s a love child of Small Giants and IIG, called Sentient, and Sentient is really about mainstreaming this idea of harnessing capital for the living world.”
A Farmer’s Market for Impact Investments
Danny has brought together Oliver Yates (ex-CEO of the CEFC) as CEO, as well as Andrew Thorburn (ex-CEO of NAB) as Chairman.
The firm will invest in businesses, but it will also help other, smaller impact investors to grow and thrive. They’ll use their long-experience and deep connections to help with distribution, building relationships and making introductions.
“So there’ll be a strong focus on renewable energy and clean energy. We’re also talking about efficiency, which will include areas of energy efficiency and waste and other things. We look at the social impact side of things, whether it’s through place-based investing or other social outcomes, you know, whether it’s indigenous or social justice agenda, and then in regenerative AG, so agriculture and food production and carbon sequestration through land and soil and seaweeds and stuff like that. So it’s very broad in that sense, but it’s really been defined to look for solutions in these areas.” Danny says.
“Again, the mindset is not asset classes, but solutions to problems. And, in designing a solution to the problem, we’ll use traditional finance methods, whether it’s debt or equity, different asset classes, or other structures of funds.”
While Danny couldn’t yet offer us more details on particular deals or partnerships, he did assure us they would be coming soon, and he’d let his CEO and Chairman explain the details.
Danny has a way with words, and his ability to communicate his views and philosophies has helped him bring people along on the journey. And so it was no surprise that a word like ‘sentient’ was chosen to represent his new venture.
It’s about existing, and feeling, about questioning what it is to be human. And so it’s ironic that it was a robot that so succinctly explained the word’s meaning.
“If I can quote from the very famous Optimus Prime, ‘freedom is the right of all sentient beings’, and if Optimus Prime thinks that, then we have to take it pretty seriously.” Danny says.
The full audio of the conversation, between Danny Almagor and John Treadgold, can be found on the Good Future podcast.