One of the top financial advisors in the country (Barron's List) at one of the most prestigious Wall Street firms is having a hard time selling an impact investing program -- a program where more than half the downside is covered.
The unique impact investment is an exclusive offering targeted for accredited investors and is only being offered to select, uberwealthy clients of "president's club" advisors.
There aren't any commission issues as everything is being donated to the program's cause (which I will get to in a minute), and the projected return on investing beats any type of money market rate: between 4% and 5% annually.
An investment where more than half your risk is covered and has better upside than a Treasury - and you still can't sell it?
That was my question to the FA who was trying to hawk the program to clients old and new.
"Nope," he said. "They won't even fill out the application so I can send the [sales] materials." Investors in private equity offerings, as any good salesman knows, must meet certain Securities and Exchange Commission guidelines. Therefore they have to fill out an application of accreditation.
"Who are you soliciting?" I asked.
"Foundations whose mission is exactly this cause."
And the cause? Health care. The impact investment program as described to me by the FA on background-hence my inability to name names-would fund $100 million worth of programs in the developing world, from disease prevention to research, to building healthcare facilities. All good things, life-saving things. But how do you make money? That again was my question to the FA.
"Royalties and PDPs," he said. Royalties could stem from a pharmaceutical company acquiring any one of the patents borne from funded research and product development programs. PDPs are nonprofit organizations with scientific, technical, clinical development and policy expertise that manage and advance portfolios of global health products. (Yes, I had to look up that definition.)