When the Future Generation investment company launched in 2014, it represented an important moment for Australia, it was a unique product that offered access to leading fund managers, with fees diverted to a curated list of charities.
The model was an important step in linking investment returns with social impact, and a step towards broader adoption of impact investing.
Louise Walsh took the reigns of the Future Generation companies early on, and managed the funds until last year when she decided to explore the next opportunity – it had been a demanding but very successful six years in which Louise led growth of FUM from $200 million to $1.2 billion.
She’d be forgiven for wanting to take a break, but instead, she’s launched her own capital raising firm, Walsh Capital. She sits on the advisory committee for the Impact Investment Summit and will be introducing a conversation between David Gonski and Andy Kuper at the summit.
OnImpact spoke with Louise about how she views the growth of impact investment in Australia, and her new enterprise.
Plus, David Gonski introduces his sessions for the summit.
Anybody in the orbit of the world of impact investment knows well the challenge of explaining this new model for finance. It sounds almost too good to be true, and it pushes up against the caricature of financial services being focused purely on profits at any cost.
Louise Walsh knows this well. Her background in philanthropy and fundraising engrained a realist worldview, and pragmatism about how people make decisions about their money.
And so, as she managed the growth of the Future Generation companies, she knew well that finance in Australia was still quite traditional, and that change would have to be gradual.
The model didn’t claim to be impact investing, but instead, it directed fund manager fees to charitable organisations.
“It’s a great model. The investor isn’t paying a performance fee, and instead of paying a management fee, which on average is about 1.3%, the Future Generation companies donate 1% of their assets to charity. It’s a real Win-Win.” says Louise Walsh.
“The feedback from high-net worth families was interesting when we did the IPO. They said, we don’t really care if it’s impact investing or not. We like it, because it’s simple. We can understand it, and we can see the difference that it’s going to make.”
The model helped people recognise that their investment capital didn’t have to be isolated from their philanthropic giving. It was an important step forward.
Leaving the Future Generation companies last year wasn’t easy for Louise, but it was made easier by planning her next project, the launch of Walsh Capital. It’s a capital raising firm where she has a very small roster of emerging fund managers. She works with them to raise capital, and push past the challenging early stages of raising funds.
“I resigned last year, and I thought I’d probably go and work for another big fund manager.” Louise says.
“Then a friend said to me, you’ve spent all your career making other people look good, and in some cases, helping them make a lot of money, I think this time round, you should have a crack yourself. He said, you’re very good at raising money, you’ve done it with many hats on, across different sectors. That’s a valuable skill, he said, because most people are not good at it, or else they hate doing it.”
Across her career Louise has managed corporate sponsorships for the Sydney Olympics, run fund-raising for the Sydney Symphony Orchestra as well as leading Philanthropy Australia as CEO. It’s a rare skill, and it ties together an ability to connect with people, while also maintaining an extensive network of like-minded people.
“When I set up the business, I had hoped to include an impact investment fund as one of the four startup clients. I just didn’t quite land on the right manager in the right fund, due mainly to the timing not lining up.” Louise says.
“But having said that, the dream client that I did have in mind, as an impact investment client, was LeapFrog. Now of course that’s a very different business to who I work with at the moment, and they don’t raise money from high-net-worth investors in Australia. But they’ve always been on my mind.”
David Gonski AC is on the board of LeapFrog’s advisory committee, and he and Louise have known each other for many years. She explained that when it comes to something like the impact summit, she wanted to bring forward the voices of the most high-achieving Australians.
“I’ll be introducing David and Andy Kuper (LeapFrog CEO). They have a great rapport, and Dave is an excellent interviewer. I actually got him to be the interviewer for the first time, many years ago now, and it works exceptionally well.” Louise says.
“He’s going to interview Andy, and he’ll talk about the journey and aspirations of Leapfrog, about how it all came about. I’m sure they’ll talk about the Temasek deal, that was a $500 million deal, by far the biggest impact deal that we’ve seen done by an Australian.”
David Gonski is Australia’s best networked person. His career is impossible to summarise, but it starts by being the youngest partner of the Freehills law farm at age 25, he was Chairman of the Future Fund, the Australia Council, and ANZ bank. And, of course, his name became synonymous with the Rudd Government-commissioned report into school funding in 2011, known as the Gonski Report.
David explained what he hopes people will take away from his session with Andy, and the impact Leapfrog is having.
“I’m hoping that from my interview with Andy Kuper, those attending will understand that investing with purpose truly can be a win/win. That the investor can achieve an excellent return and the effect of that investment can be the improvement of the lives of many.
LeapFrog serves as a beacon in this area and CEO Andy, who was a founder of the industry, can highlight best this synergy” David Gonski says.
Louise is on the advisory committee of the summit, and as a professional networker, she knows the power of in-person events for bringing a community together.
“I joined the advisory committee pre-Covid so that’s a few years now. And what’s really powerful about the summit is that it’s the only credible impact investing conference in Australia and the region.” Louise says.
“It’s a really outstanding conference for people who are still exploring the world of impact investing. I meet people all the time that want to be more educated, they like the sound of it, but they don’t know much about it. And I think it’s a fantastic couple of days for someone who’s not very experienced, who’s got a bit of interest.”
The Impact Investment Summit runs from 30th of March to 1st April, at the International Convention Centre, Sydney. Early bird tickets are currently available.