Why Good Capital Series: Jolyne Caruso

The Good Capital Project will convene for the first time this June in New York City. This new SOCAP initiative will bring together a cross-sector collection of experts, practitioners, industry leaders and other stakeholders to drive greater collaboration and accelerate capital flows into purpose driven investments. In the months leading up that event we will be interviewing key pioneers and leaders in the impact space who have partnered with SOCAP to help make the Good Capital Project a success.

Jolyne Caruso is the founder and CEO of The Alber­leen Group. She has over 30 years of finance expe­ri­ence in both global cap­i­tal mar­kets and asset man­age­ment busi­nesses and previously worked as global head of absolute return strate­gies at Lehman Broth­ers while serving on the man­age­ment com­mit­tee of the firm. Prior to Lehman, Caruso was co-founder and pres­i­dent of Andor Cap­i­tal Man­age­ment, a technology-focused hedge fund. From 1992 to 2001, she was man­ag­ing direc­tor and head of equi­ties Americas at JP Mor­gan and she began her career at Bear Stearns in insti­tu­tional equity sales.



SOCAP: What led you to become involved in The Good Capital Project? What are you most excited about?

Jolyne Caruso: My introduction to Good Capital Project was through Bob Caruso whom I have known for over 20 years from our past lives managing large hedge funds. It's very interesting how we both evolved from the absolute return world to impact investing. It was a real pleasure for me to reconnect with him and learn what he was doing with the Good Capital Project. We talked about it and I immediately said, "I want to be part of this."

I unintentionally got into the impact space. In 2010, we started The Alberleen Group and currently work with family offices to identify and structure interesting, direct investments into privately-held companies. Over the last six years, our business evolved by continually gravitating towards investments in companies whose mission is to benefit society or the environment. We started investing in renewable energy deals since we have industry expertise in that sector, and had some successful exits while also generating a measureable environmental impact.  We have since evolved into healthcare and real estate deals that are serving underprivileged communities.

Family offices and foundations are going to be leaders in this effort- not the traditional institutional investors and I hope that we can share our experiences working with families and introduce them to the project.

Why is collaboration so important in this industry? 

JC: What really surprised me about this industry is how collaborative it is. I began my career on a trading desk as a young woman, just out of college. It was all about winning and being competitive. Climbing the league tables often meant that you had to keep a lot of your knowledge proprietary.  

What I respect about the impact world is that it is truly collaborative. The foundations talk to each other. They share best practices. The impact companies all talk to each other and convene at conferences. Impact is about identifying the problems and solving them with the right type of funding. Tackling global issues in the environment or society must be done by mobilizing large groups and the leaders in impact understand this.

What are the biggest challenges facing the space?

JC: I've thought about this a lot as we have tried to scale our direct impact investments. From our own experience, deploying large amounts of capital in impact investments is a real challenge right now because so many of the companies in the impact world are early stage. They're innovative companies that have enormous potential but many need smaller amounts of capital and many will fail.  

The industry needs to more clearly define impact investing and continue to educate the investor base. There are misconceptions about the return potential in the sector with many investors associating impact with concessionary returns and there is also confusion about impact measurement. The impact conferences, more data around financial returns across the capital stack and white papers are all needed to advance the sector.

What are the biggest opportunities?  

JC: Finance professionals can help the industry implement financial rigor, and structuring which will create even more capital by generating strong investment returns. Could you imagine what will happen as more investors realize that they can generate significant financial returns by investing in companies that also have a measurable social or environmental return? It will transform the way many investment portfolios are constructed.

What would you most like to see come out of The Good Capital Project? 

JC: The challenge with a project of this scope is that you have to clearly map out what you want to accomplish. But if the project can actually mobilize various constituencies in impact and advance the industry, similar to what the hedge fund industry did in the 1990’s, impact will become mainstream and many of the world’s most pressing problems will have the necessary capital to solve them.  

Why is now such a critical time to start this project?

JC: There are two things that are really driving impact at this moment. When I see families starting to talk about how they're shifting their philanthropy and how they're actually using their foundation money to do impact deals, I know we're on the cusp of a trillion dollar opportunity to expand impact. When I read the Ford Foundation announcement that they're putting one billion dollars of their endowment into impact I said, "We have hit a critical turning point."

We are seeing the younger generation of families embracing purpose and impact in everything they do. We have all read about the wealth transition that's going to occur over the next 20 years and this millennial generation and beyond are going to do impact in ways that we cannot imagine.

Is there anything that you're working on right now that you are particularly proud of or excited about?

JC: Last year we decided to bring our family offices together and hosted our first impact conference. Our goal was to really drill down on impact direct investments and we wanted the families to leave with a better understanding of how to structure impact investments, to understand the spectrum of returns available and where the best opportunities existed across industry sectors.   

This year we're hosting our event and are honored that Jim Sorenson, Ron, Marty, and Stephanie Cordes and Fran Seegull will be among our keynote speakers. I’m proud that the Alberleen Group can actually be a guiding hand in impact for families. We are helping to educate them by directly investing alongside them in exciting new companies. This community is going to be so powerful, because it is collaborative, it's intentions are pure, and it has heart. I think that's what's going to make impact investing among the greatest trends in investment history.