NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, September 10, 2014

IF there is a traditional path to becoming an impact investor, it is the one taken by David Keller, who made a lot of money at a young age and retired from Cisco Systems in his 40s in 2002.

Mr. Keller got the idea of starting a family foundation and wondered if he could do more good by putting some of the foundation’s money in investments that would have a positive social impact.

“With a modest family foundation, I knew I wasn’t going to change the world,” Mr. Keller, now 60, said. “The whole idea of combining my values with investment returns made a lot of sense in the context of just small grant-making. I wanted all of it to work together.”

Twelve years later, 10 percent of his wealth is in so-called impact investments — those made in companies, organizations and funds with the intention of generating a measurable, beneficial social and environmental impact.

While these investors are also seeking a financial return, the kinds of private investments Mr. Keller has made — as in Generation Investment Management co-founded by Al Gore and David Blood — tend to be risky in the same way other private equity investments are and less liquid than investments in public companies.