Conventional wisdom states investment funds should focus on stable companies with long track records of steady returns. Those investors who can stomach a little more risk may gravitate towards aggressive growth funds that can reap big returns by inventing in companies with undervalued stocks, recent IPOs or companies' securities that have a long history of volatility.
One Zurich-based, fund, however, is generating wealth for investors while boosting sustainable development opportunities worldwide. Led by a portfolio manager with 25 years of experience who has conducted business in over 40 countries, this fund invests about $1.2 billion a year in ventures across the globe - and doing so in places usually off most investors' radar, from Egypt to Bhutan.
ResponsAbility currently manages approximately $3.3 billion in assets. The fund evaluates what it sees as promising investment opportunities in developing countries and completes about 500 various transactions annually. Managers of the fund claim that each of these investments cultivates inclusive growth and shared prosperity. ResponsAbility focuses on three sectors, energy, finance and food. Meanwhile, both retail and institutional investors can purchase both private equity and and private debt offerings.
According to a recent article on Bloomberg, ResponsAbility seeks a net return of between 15 and 18 percent annually for its agriculture private equity investments - and these funds' largest investors happen to be Swiss pension funds.
One of ResponsAbility's marquee agriculture investments is Mountain Hazelnuts, based in Bhutan. The company seeks to work with thousands of small-scale farmers across the small Himalayan country to boost exports of this lucrative crop. Horticulture experts are currently developing seedlings best suited to thrive as trees along Bhutan's mountainsides, while an outreach team identifies potential farmers. If a farmer does not own suitable land for hazelnuts, then agreements are made with local landowners or government-owned land is leased for orchards. And Mountain Hazelnuts operates as a social enterprise inclusive of everyone; hazelnuts in particular are an attractive option for elderly farmers or families headed by women, as they tend to struggle with financial security.
For ResponsAbility, this Bhutanese hazelnut venture is a no-brainer. Currently, 70 to 75 percent of the world's hazelnut production is concentrated in Turkey; according to Quartz, one-quarter of all hazelnuts are grown around the eastern Anatolian town of Ordu. To have suppliers based in one region is a risk that keeps plenty of producers up late at night, including Nutella or retailers such as Trader Joe's. Backed by ResponsAbility's investment, Mountain Hazelnuts' 600 employees seek to change that dynamic, while boosting local incomes in rural areas and empowering women in the process.
ResponsAbility is also aggressively investing in the energy sector, and in regions where reliable power is needed the most.
Across Africa, ResponsAbility partners with various financial institutions and energy companies on renewable power projects. In Namibia, a 5MW solar project employs locals while boosting local energy security. Small-scale hydropower projects are also part of ResponsAbility's portfolio - and in Kenya, their combined 26 MW of clean power will electrify up to 200,000 households.
These projects are designed for the long term. Whether the end results are the scaling up of organic rice from Cambodia or cashews from Togo, these investments are not for buyers seeking a quick buck. But ResponsAbility's investments are certainly paying off, providing social and economic benefits in overlooked communities worldwide while generating steady returns for customers at home.
Image credit: Mountain Hazelnuts
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's worked an lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.