Jacob: So what I can say is, we were careful to – one of our most important metrics was a public market equivalent, so what we did was essentially took our group of impact investments and then compared them to what we thought was -- through cash flows through the public market equivalent, which we chose as the Russell 2000. The Russell 2000 was gross of fees as well. So yes, you can pay lower fees if you pay someone to manage your money into the Russell 2000 or other microcap stocks than you would in a bunch of private equity funds, but it is to some extent apples to apples as a comparison. I guess what I would say is, don’t hold your breath, but stay on the line because we are coming up with a follow-up report which will look at net of fees and compare net of fees in the private market. The traditional private equity market to net of fees in the impact investment private market, and that’s probably the most same comparison, and it was actually with a much larger sample set as well. So that’s probably—if you were going to speak to a fiduciary, that’s the study I’d want them to read.
Ron: If I can add a little bit to that answer—not necessarily a net or gross of fees issue, but I think to some extent market returns are in the eye of the beholder, and you know we’ve created a sustainable real asset strategy with a mixture of private equity funds, and one of them has an expected return of 7%. For private equity, that’s below market. Certainly far below market. But in terms of the objectives of the foundation, a 7% return would be considered market, if you’ll compare it to other asset classes. In some situations, foundations have put that in their traditional portfolio as a market-generating investment. But in some other situations, we’ve seen them move that into a PRI because they see that as below market, as below the private equity market expectation. Is that a fair observation?
Jacob: Yeah, I think so. And I have one other point, which is when you look at a distribution of the kind of returns you see in a private equity, in traditional private equity, you see that the true median of private equity is that it’s not performing that well. It’s not risk adjusted. You have to be in the top quartile if you expect to get those private equity returns that we think of as risk adjusted. Well, it turns out the impact investing space is precisely the same. When we looked at the distributions, it was remarkably similar, so the moral of the story is you should have a portfolio, and they should all be top quartile funds.
Teresa: I think one other thing that is really important when you’re talking about impact investing is paying attention to who your intermediaries are. There’s a ton of confluence towards this idea. There’s a ton of demand for these types of solutions, and now there’s a lot of people throwing out a shingle as an impact investor that is running a product. At the end of the day, it comes down to really understanding those strategies, understanding the solution, understanding the intent. And really understanding what you’re paying them, because in a lot of cases, those intermediaries are the ones that are offering you something that is super impact aligned, and oh, it’s below market rate, but I’m making a mint. So it’s making sure that there really is that solid alignment of interest between the people who are deploying the capital and the people who are fronting the capital.
Ron: To enhance that answer a little bit, I can’t tell you how many times I have managers coming into my office and pitching their impact strategies, let’s say it’s a clean energy fund, so my first question is, so show me your impact metrics. I want to see your success record from an impact, a nonfinancial standpoint, not a financial standpoint, and I have had those managers look at me like I had three heads. And so to me, that’s an immediate exit out of the office because you’re not an impact manager; you’re green-washing your strategy.