Billionaire Lukas Walton’s family office fans impact investing push

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Inside the $4 billion family office of Walmart heir Lukas Walton

Builders Vision, billionaire Lukas Walton’s investing and philanthropy platform, has shifted its $1 billion endowment to impact investments, ushering in a broader shift from family offices to invest and give to one another associate.

Chicago-based Builders Vision announced today that its Builders Initiative Foundation has invested 90% of its endowment in “mission-based” investments – investments that align with Builder’s broader goals of sustainability and equity. Most foundations have 20% or less of their capital invested in ESG or impact investing, so the 90% mark sets a new benchmark for family offices and foundations.

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CNBC ProInside the $4 billion family office of Walmart heir Lukas Walton

“If we’re going to make lasting change, we need to demonstrate our mission in everything we do — especially how we use our resources,” said Lukas Walton, grandson of Walmart founder Sam Walton. “That’s why we invest our foundation capital in companies, organizations and strategies that prioritize sustainable and just solutions.”

(PRO subscribers can watch an exclusive interview with Walton on this news and his overall investment strategy here.)

Walton, 36, is at the forefront of a rapid generational shift in family offices as heirs and entrepreneurs in their 30s and 40s use their wealth to drive social change. For decades, family offices divided their philanthropy and investments – making money on one side and giving on the other. The new generation wants their investments to pursue the same solutions as their giving, by fusing “profits with purpose.”

“We believe that profit and purpose are not mutually exclusive, quite the opposite,” said Matt Knott, President and COO of Builders Vision and a former PepsiCo executive. “Purpose-oriented companies will have a competitive advantage in the future. The brands and companies that people feel comfortable with will have a competitive advantage.”

Billions for social change

Even as ESG investing faces backlash and criticism of “greenwashing,” the rise of impact investing among family offices is accelerating. A Credit Suisse survey of family offices found that almost half of the family offices surveyed plan to increase their sustainable investments over the next 2-3 years. As more family wealth is passed down to younger generations and more tech fortunes are created by young founders, family offices are pouring billions into startups, stocks and private equity aimed at social change.

“This next generation is unstoppable,” said James Gifford, Head of Sustainable and Impact Advisory and Thought Leadership at Credit Suisse. “They bring out the best of free markets and social innovation.”

Knott, President of Builders Vision, adds, “This new breed of family office wants to make an impact, they want to make a difference with the wealth they inherit.”

Builders Vision, which has more than $4 billion in assets, includes a direct investment division, wealth management unit and philanthropy. All target three main themes: nutrition, marine health and energy transition. Builders Vision has assembled teams of in-house experts to fund the ideas with the greatest impact and share them across the philanthropy, startup and investing world. The Builder’s Initiative Foundation is part of Builders Vision’s philanthropic arm, which has multiple funds and capital pools, each with its own unique goals and investment mission.

Philanthropy, Walton says, cannot solve the world’s biggest problems, even with government help. The big technological innovations needed in the fields of energy, agriculture and the environment will likely come from entrepreneurs. At the same time, many impact start-ups are too risky for traditional venture capital firms and angel investors. Walton and his team say Builders Vision and other large family offices are uniquely positioned to fund businesses and nonprofits across the risk spectrum.

NGO to IPO

“We aim to provide the capital solution from NGO to IPO,” said Sanjeev Krishnan, chief investment officer of S2G Ventures, Builders Vision’s venture capital fund.

For example, the Builders Initiative Oceans team used an LLC to invest in a small start-up called Matter, a UK-based company that develops engineered solutions for the collection, harvesting and recycling of microplastics. As it grew, it became an attractive venture capital investment, leading Builders’ VC arm, S2G, to recently invest seven figures.

S2G has funded 80 companies with approximately $2 billion in capital and was an early investor in SweetGreen and Beyond Meat. The portfolio includes everything from Farmer Focus, which works with family farms to raise organic chickens, to Common Energy, which funds community solar projects.

While Krishnan declined to give specific returns, Cambridge Associates benchmarks rank S2G in the top quartile of VC firms.

With its 90 percent shift of the foundation to mission-related investments, even the Builders Initiative Foundation endowment — which funds philanthropy — is now focused on positive social and environmental impact. Builders Initiative chief investment officer Noelle Laing said the real return target is still 5% net of fees, which is common for foundations.

“We believe you can achieve market-beating returns while integrating ESG factors and incorporating an impact lens into our strategies,” said Laing. “We think it’s just smarter to invest.”