BUSINESS Bloomberg Businessweek March 1, 202114
CHOU: PAUL YEUNG/BLOOMBERG. NEILSON: COURTESY I(X) INVESTMENTS○ A Buffett grandson’s company is selling rich
Asians on the idea of doing well by doing goodImpact
Investing
Heads East
Veronica Chou, the 36-year-old heiress to the Chou
family fortune that helped build the Michael Kors
and Tommy Hilfiger brands, says there’s more to
life than pursuing the latest styles in the fashion
world. So Chou, who grew up working in her bil-
lionaire family’s factories and later ran a business
that helped introduce global fashion brands includ-
ing Ed Hardy and Madonna’s Material Girl to China,
has started her own line of sustainable clothing,
Everybody & Everyone. Chou says she became inter-
ested in sustainable business after seeing firsthand
China’s challenge with pollution and after the birth
of her children. She now steers her family’s invest-
ments into technologies that combat climate change.
Chou has become an investor in I(x) Investments,
a company co-founded by Warren Buffett’s grand-
son, Howard Buffett. Pursuing a belief that so-called
impact investors can profitably use their private
capital to do societal good, I(x) has drawn some ofthe world’s wealthiest families to invest together to
address climate and sustainability issues.
“A lot of impact investment is driven by younger
generations who want to live more sustainably,”
Chou says. “We all feel these deals we’re involved
in are groundbreaking and can potentially change
the way we live.”
I(x), based in Santa Monica, Calif., has brought
together more than 65 families from 14 countries
to make long-term investments in innovations that
tackle some of the most pressing environmental and
social problems, such as clean energy and affordable
housing. Investors in I(x), who include Joe Gebbia,
the 39-year-old newly minted billionaire co-founder
of Airbnb Inc., and the Desmarais family, which built
Power Corp. of Canada, benefit from an unusual
company structure that exposes them early to sus-
tainable business opportunities—some unearthed
by I(x) management and others advanced by other
wealthy members of the group. Then they can invest
in ideas through I(x) or do side deals on their own.
A recent study of 1,700 impact investors found
that assets under management grew from $502 bil-
lion in 2019 to $715 billion last year, according to the
Global Impact Investing Network. Impact funds and
companies are now turning to Asia, to attract new
socially conscious investors and as a place to invest.
The second-fastest-growing region for impact fund
allocations, after Europe, is East and Southeast Asia,
according to the GIIN survey.
“There’s a new role—a new mindset—for private
capital in the world,” says I(x) Chairman Trevor
Neilson, who co-founded I(x) in 2015 with Buffett
after working for the Bill & Melinda Gates Foundation
and the Gates’ family office. “We have to create a
circular economy that decarbonizes the way we
live our lives and addresses the climate emergency.
Private capital is the best way to do that at scale.”
Buffett, who now takes a back-seat role in the
company, helped establish a proprietary system to
measure the social impact of its investments. The
portfolio includes companies working on clean
water, green homes, and clean energy. I(x), valued
at about $100 million, has attracted mostly family
offices. About 80% of the projects it invests in come
from the clients themselves. “They are all successful
and have vetted these projects they introduce,” says
Angelica Fuentes, an investor whose family owns
energy-sector businesses in Mexico. “It’s about being
around like-minded people—families from around
the world coming together with the understanding
that we can make a difference.” —K. Oanh HaTHE BOTTOM LINE Impact investing, where private capital is
used to better society, drew $715 billion in assets in 2020. The rich
families behind I(x) Investments want to bolster that trend.○ Neilson Chou