Investor in Focus: Why Blue Haven Initiative’s views “irritate everyone”

Blue Haven Initiative’s co-founder Liesel Pritzker Simmons knows about influence. Her extended family is one of the wealthiest in the US, reportedly worth billions of dollars – the Pritzker Group is a majority owner of the Hyatt hotel chain – and several relatives are high-profile figures in philanthropy or politics. Her cousin, JB Pritzker, is the governor of Illinois.

Pritzker Simmons is making waves of her own in impact investing, through Blue Haven Initiative, which she founded with her husband Ian Simmons in 2012, at the time still in her 20s. This was one of the first family offices set up with impact investing as a primary focus; its “total portfolio” approach – that is, aiming to invest 100% of assets for impact – saw it named impact asset owner of the year in 2018 by GSG Impact. Pritzker Simmons also co-founded The ImPact, “a global network of families committed to aligning their assets and values”, and sits on various other boards and committees. 

At Blue Haven, the couple have a hands-on role as principals. The family office invests in public and private markets, makes direct impact investments mostly in sub-Saharan African businesses, and, where more appropriate, provides grants and concessional loans. (While it does not disclose most figures, it does reveal that it has so far invested $160m in clean energy and climate, and $120m in financial inclusion.) Unlike many impact investors, Blue Haven is not shy about speaking out. “We try to be vocal and use our voice and position to influence what we can,” says Pritzker Simmons. An initiative the office recently co-created, Policy-Enhanced Impact Investing, aims to encourage more investors to follow its lead in engaging more with policymakers to increase their overall impact. 

For Pritzker Simmons – a former child actor in 1990s Hollywood movies, who has a degree in African History from Columbia University – there’s one thing that would really change the game: “an honest-to-God, genuine, global conversation about a fair taxation system”. Blue Haven created Better Taxes for a Better America, a group of funders and advocates “striving for a fairer tax code”. Yet talk of a wealth tax, which she and her husband support, is still taboo. “This gets me kicked out of all the family office conferences,” she laughs. 

Read on for an extract from our conversation.

Pioneers Post: You work across a number of areas. Is there one in particular that feels really core to your work?

Liesel Pritzker Simmons: Luckily, loads of people are building out multi-asset class impact portfolios on the market-rate side. That is less unique these days than the ability to deploy patient, impact-first or catalytic capital. Those dollars are more rare. 

The other piece that is important is… none of these outcomes are really ‘sticky’ without a functioning democracy. We can’t think of our investments as being in a bubble, immune to what is happening politically, because things can get turned around really quickly when political will shifts. How you keep people engaged early and often in protecting their own right to govern has always been something that we’ve thought is really, really important.

Business has a very loud voice in setting policy agendas. But actually the impact investors have typically not shown up

Graduates of the RIKA Leadership Programme celebrate in Nairobi. The programme supports human capital development in Africa and is backed by Blue Haven Initiative (credit: RIKA)

PP: Concretely, how can an impact investor play a role in civic action and democracy?

LPS: Business has a very loud voice in setting policy agendas – we all know that. But actually the impact investors who have extra-financial goals and try to look at things from more of a systems lens, have typically not shown up [with] state, local, federal policy makers, letting them know how many jobs are created in the impact economy, why certain policies make it easier for certain kinds of capital to flow in different areas. 

You’ve had some of this in the past with Opportunity Zones [incentives to spur investment in lower-income communities]. But typically fund managers who run impact funds haven’t spoken to their legislators. If you’re an edtech fund, what the Department of Education is doing and how they set their policies is probably very relevant to what you’re doing. And you don’t just care about the carried interest loophole. You actually care about education policy as well. 

One fund manager we’ve worked with for many, many years, Community Investment Management, is a private debt fund, and they lend to small businesses through online lending platforms. They care very deeply about making better lending practices for small businesses. There are very few protections in the US for very small business lending; they can get really caught up in quite usurious terms, there’s not a lot of transparency – and so Community Investment Management… is trying to combat that, but they are also working with state legislatures to put forward a small business-lending bill of rights that lenders would have to abide by in those states. Things like that we’ve helped support. 

PP: What does your support look like? 

LPS: It can take different forms – in that particular case, it was a grant to the Responsible Business Lending Coalition to help hire somebody. We are not afraid of using c4 dollars [giving money to a 501(c)4, that is, a nonprofit that is allowed to lobby and endorse specific political candidates]; we ourselves are campaign contributors to various races. We want to try and use the tools we can.

Impact investing has permeated into the family office space

PP: What are the risks for an impact investor getting into this world?

LPS: Well, you’re getting political! And I get this – that feels very scary and kind of muddy. It would be easier just to focus on this one fund, that one beneficiary, that output, that outcome. And I understand. I just think we live in a world that is muddy.

There’s been a lot of talk in the impact investing space about ‘systems thinking’ and ‘bringing a systems lens’ to impact investing. And I think if you’re going to be honest about any kind of systems lens, you obviously must wade into some of these muddier political [areas]... you can’t talk about a system without talking about taxes. It’s not a system if you’re just mapping a supply chain – that’s a supply chain.

Lobbying… has such a negative connotation… it doesn’t feel clean and pure, and I understand that argument. I just think [with] the great work Community Investment Management is doing, the impact thesis would be enhanced if the rules were better. And how do we get those better rules? How do you influence those legislators and make the case that this is good for their districts? That’s good, old-fashioned political work: talking to somebody, making a case, writing a paper. That’s what you do. And I think, as an impact investor, it’s worth doing.

• Read our Impact 101: What is systemic investing? 

PP: How does it feel to be doing that in the current political environment?

LPS: I think everyone is getting more creative around how you work together, how you form unlikely coalitions. So, oddly, I actually think it’s a really good time, because nobody knows anything! Nobody is really entirely sure what the agenda is, and it’s actually creating a bit of creativity. I’m optimistic.

PP: What are the particular opportunities, but also the challenges, that the family office structure creates?

LPS: The flexibility, and, depending on the governance structure, the nimbleness that family offices can theoretically have, I think, is really helpful. We shouldn’t be asking a pension fund, whose job it is to pay their pensioners, to be taking wild, illiquid risk. So family offices are inherently well suited to this kind of work. And they also care about legacy. They care about impact. They care about being good actors, hopefully, in the spaces where they are. 

Where things get tricky is family dynamics. You’re often convincing someone or making a case for something with competing priorities, depending on how the family office is structured, and the different and divergent interests of the principals.

Because there is so much flexibility, and family offices can look however they would like to look, sometimes I’ve found some sort of decision-making paralysis, because no one knows what the best family office looks like. Sometimes that’s almost too much choice. I’ve seen that sometimes slow down action because you’re just trying not to screw up, which is a tough place to make brave decisions from.

There’s also finding great teams – because working for and with a family has its own set of challenges, and really talented people might want more control. There can be some wrestling around decision-making and ultimate authority sometimes. 

All these can be overcome, but those are some of the tensions that I’ve seen. 

Family offices can look however they would like to look… sometimes that's almost too much choice. I've seen that sometimes slow down action 

PP: Do you see enough family offices leading the way in this? Is there room for many more? 

LPS: I think there’s always more [room]. But I do have to say that there are more and more, increasing all the time, coming into this.

What I do think is really cool is, for really wealthy families 20 or 30 years ago, it might have been, “ah, we will sign the Giving Pledge, and we will become the best strategic philanthropist that we can become”. And today, that standard isn’t good enough. Fantastic, set up your foundation, that’s great. But no innovative family office today does not have, or hasn’t addressed why they don’t have, an impact investing focus of some kind. 

First of all, most of them do consider their focus area in their investments. And if they don’t, they know they’re going to get asked: “why not?” So to me, impact investing has permeated into the family office space. 

PP: Regarding the impact investing landscape more broadly, is there something that frustrates you, or that you would like to see change or improve?

LPS: Oh, yeah. This gets me kicked out of all the family office conferences: taxes! We’re big proponents of any kind of wealth tax. There are six of them out there – pick one. But just a genuinely more progressive, global taxing system – there’s no way anyone’s going to get to where we want to go on any impact front without addressing this. This irritates everyone, even the impact investors. An honest-to-God, genuine, global conversation about a fair taxation system – that, I think, would be really great, but absolutely nobody wants to do that… I think that would be my one magic wand.

Top photo courtesy of Blue Haven Initiative