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A Day on Impact Investing with Andy Kaufman of Community Capital Management

April 26, 2018

Andy Kaufman with undergraduate students with the Nittany Lion Fund. From left:  Emma Lee, Aileen Barrett, Robin Stevens (Dir of Wall Street Initiatives), Andy Kaufman, Mike McPeck, Stephen Nowelski, and Owen Wing

 

We recently had the great pleasure of welcoming Andy Kaufman (Finance 04') back to campus.  You might recall the announcement with more detail weeks ago. Andy spent 10 years on Wall Street and is now a senior portfolio manager with the impact investment firm, Community Capital Management. (What is "impact investing"?) Andy was very generous with his time, expertise and character.  He powered through a gauntlet of meetings...

  • With faculty about the development of a gender lens fund

  • With undergraduate finance students with the Nittany Lion Fund

  • MBA students

  • Directors of Careers Services

  • Paul Shrivastava, Penn State's Chief Sustainability Officer

  • and our very own Erik Foley, Smeal's Director of Sustainability

Some excerpts from my notes during the day:

  • What we now call "impact investing" will someday just be investing. Much like "smart phones" are now just "phones". Impact investing will become the new standard for one simple reason:  it is an improved, more precise methodology for risk-adjusted returns.
     

  • Sunday night excitement or dread?  It's worth making a career change that removes the sick feeling some have in the pit of their stomach on Sunday nights. Andy had a great story about this from his own experience which involved the little ditty at the beginning of The Simpsons he would hear Sunday evenings. It used to cause dread, now anticipation.
     

  • Large capital investments in sustainably designed buildings and campuses (such as those seeking LEED certification) often miss the financing opportunity. Proponents may point to reduced operating costs and improved worker health and productivity, but miss the opportunity to attain lower costs of capital when issuing debt.
     

  • Mistreatment of women in a companies supply chain and operations represents both an moral failing and a material financial risk. The concept of a gender lens fund, a bundle of companies whose practices uplift women and advance gender equity, was new to me and I find it very hopeful, important and exciting. We are continuing this work with CCM. 
     

  • "Always bring a notebook and a pen to every meeting." Besides dispensing some great knowledge about finance and the inner workings of equity and debt markets, Andy shared some "street wisdom."  Our undergraduates received a poignant lesson in bringing paper and a pen to every meeting. 
     

  • The power of character.  In addition to his knowledge and commitment to using the power of finance to benefit others, I was impressed by his character.  It might be old fashioned to talk about character anymore, but it still matters, perhaps more than we realize.  He has obviously had great mentors, has worked in good cultures with high standards and has put forth the effort himself. This is key. It's one thing to be smart and skillful, but without character these gifts won't be multiplied. (see Adam Grant's Give and Take, 2014). They are like a candle and a wick with no flame. But when you add kindness, strong communication skills, generosity, preparation, courteousness, authenticity, and the rare ability to listen well, then the candle is lit.

 Andy with a great group of Smeal MBA students

 

Andy meeting with Aparna Joshi, the Arnold Family Professor of Management at Smeal whose expertise is in multilevel issues in workplace diversity including gender equity. 

 

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