Family Offices

The Impact Investors of the Future

By 2024, family offices will increase their commitment to sustainable investments to nearly 1/3 of their average portfolio.*

With new and ever-evolving sustainable, responsible, and impact investment mandates, family offices and their teams must navigate the complex intersection of return on investment and impact.

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First Affirmative – Your Partner on the Journey

With more than 30 years as the leader in sustainable, responsible, and impact investing, First Affirmative partners with family offices to deliver the impact investing insight, returns and economic, environmental, and social alignment that demanding families require.

We emphasize a collaborative, in-depth process to help produce and deliver outcome-oriented Sustainable Investment Solutions that meet your family office’s financial and impact goals.

How Will You Get There?

The interest in sustainable, responsible, and impact (SRI) investing in the family office is expanding at a rapid pace, placing some private wealth managers in unfamiliar territory. We know you may have a lot of questions and we are here to answer a few of them below:

We emphasize an in-depth collaborative process that ensures we capture all your organizational priorities – both financial and impact as we help you develop an SRI/ESG investment strategy. Each client we work with is unique, with diverse financial, social, moral, ethical, and religious factors to consider in their investment decisions.

First Affirmative carefully manages and monitors risk at the firm, strategy, and client levels. We employ well-honed processes and tools at each level, incorporating the sophisticated Morningstar and FactSet portfolio assessment and monitoring applications. Portfolios are constructed and monitored to remain within specific risk targets while achieving our clients’ individual financial and impact objectives.

Our unmatched institutional grounding in the SRI ecosystem allows us to deliver the fundamental research, quantitative techniques. portfolio construction and management methodologies that can help get your family office where you want to go.

Education is a critical first step toward building your unique Custom Sustainable Investment Solution. We work with you to identify your individual impact preferences and financial objectives. We have done extensive research on specific environmental, social, governance, and ethical issues, as well as the portfolio construction techniques that allow us to build well-balanced solutions to meet your financial objectives — regardless of the number of preferences you wish to incorporate into your portfolio.

First Affirmative offers three Sustainable Investment Solutions: Custom, Multi-Manager, and Managed Mutual Fund.

Our Multi-Manager and Managed Mutual Fund strategies are constructed from a list of carefully vetted third-party managed models or mutual funds. These strategies are customized to accommodate clients with Traditional SRI and Traditional SRI + Fossil Fuel Free impact preferences.

If your family office would like additional customization, our Custom Sustainable Investment Solution is the best choice. It lets you choose from among more than 50 Impact Preferences to create a “personal” investment universe that is perfectly aligned with your office’s social, environmental and ethical values and beliefs.

All of our Sustainable Investment Solutions are constructed along seven risk levels (from Very Conservative to Very Aggressive) to meet your individual financial objectives.

Impact measurement is critical to a successful, long-term SRI investment strategy. As management expert Peter Drucker once said, "you can't manage what you can't measure." Drawing on our more than 30 years at the center of the SRI ecosystem, we apply a variety of metrics to help family offices ensure that their portfolios remain aligned with their values and preferences.

CSIS Impact Performance

The chart above demonstrates First Affirmative's commitment to measuring impact. In it we look at the exposure of three different First Affirmative Custom Sustainable Investment Solutions relative to each other and their global benchmark. The chart measures revenues associated with five actionable impact themes: Basic Needs, Empowerment, Climate Change, Natural Capital and Governance. The analysis was run by Blackrock using MSCI data.

We offer three programs (Custom Sustainable Investment Solutions, Managed Mutual Funds, and Multi Manager accounts); our most customized Sustainable Investment Solution is also the most cost effective.

Numerous studies and statistics support our view that sustainable, responsible, and impact investing and mainstream financial returns are not mutually exclusive.

Figure IV_ Performance Relative To Expectation (updated)

  • In a 2019 study by The GIIN of a diverse group of 266 institutional impact investors, that included family offices, over 90% of respondents reported performance “in line with or exceeding both their impact and their financial expectations.”
  • Additionally, about 15% reported that their investments had outperformed their expectations since inception. 

 

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  • The MSCI KLD 400 index – composed of 400 large-, mid- and small-cap (publicly traded) US companies with high MSCI ESG Ratings – reflects sustained, consistent relative performance of this standard SRI benchmark against the S&P 500 Index.
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The First Affirmative Competitive Advantage

  Investment Expertise – We are a pioneer in SRI investing with over 30 years of experience.

  Client Focus – We provide outcome oriented sustainable investment solutions underpinned by technology.

  Passion – Our client assessment process goes beyond just meeting financial objectives.

  Commitment – We deliver customized investments based on individual client risk, return, and impact objectives.

  Accessibility – Development of products and digital platforms that are the future of reinvesting.

  Committed to Shareowner Advocacy – We work on behalf of the clients of advisors, often collaborating with industry partners, to engage with companies to positively influence their behavior.

  Certified B Corporation – First Affirmative is proud to be a Certified B Corporation. In addition, we worked with the American Sustainable Business Council (ASBC) to support the legislation that passed the law making Colorado (our home state), the 15th state to allow businesses to incorporate under the B Corp structure.

Our Process

Our unmatched institutional grounding in the SRI ecosystem allows us to deliver a unique combination of the insights of fundamental research combined with the objectivity of quantitative portfolio construction techniques, products and services, and a focus on the client that can help get where you need to go.

The First Affirmative Process

FAFN-Family Office Page Diagram-1Fact Finding and Documentation

  • Establish understanding of organizational values
  • Set impact investment objectives, timing, risk tolerance, and liquidity requirements
  • Identify asset classes, geographic/industry sectors, and individual companies to be included/excluded
  • Formalize an impact investment policy statement (IPS)

FAFN-Family Office Page Diagram-2Construction and Implementation

  • Identify appropriate investment vehicles
  • Assess client impact preferences and investment objectives
  • Submit recommendations for approval
  • Construct and implement impact Custom Sustainable Investment Solution

FAFN-Family Office Page Diagram-3Managing and Monitoring

  • Monitor impact and financial performance
  • Update, rebalance, reoptimize portfolio as required
  • Identify new investment vehicles as needed
  • Compile and deliver periodic investment reviews

Dispelling the Performance Tradeoff Myth


"We are not willing to take a lower return just because it has social impact. If you do it the right way, you can achieve a return set to market."

- Principal, Single Family Office, Europe


We agree!

Numerous studies and statistics support our view that sustainable, responsible, and impact investing and mainstream financial returns are not mutually exclusive.

Let us tell your more!

Ready to Make the Next Move?

Contact Us

To review how First Affirmative's Investment Consulting Group addresses the top challenges for Family Offices and their SRI/ESG investment initiatives, complete the Contact Us form.

*Global Family Office Report 2019, UBS and Campden Research