Why Impact Investing is a Sustainable Solution to Global Challenges with H.S.H. Prince Max von und zu Liechtenstein

H.S.H. Prince Max von und zu Liechtenstein is chairman of the wealth and asset manager, LGT group, managing over $300 billion US dollars worth of client assets from offices in 20 of the world’s key financial centers.

But what motivates Prince Max, a member of the Liechtenstein Princely Family, a family that has been entrepreneurial for centuries and today runs a company portfolio ranging from agriculture and forestry to the production of alternative energies and the financial industry?

Let’s find out.


Prince Max’s passions

There are three things Prince Max is passionate about:

  1. Being out in nature, something he’s done since he was a small boy, and where some of his strongest and nicest memories were created.
  2. People, he’s always been a people person, especially his immediate family, but more generally he enjoys interacting with people.
  3. And last but not least, he’s incredibly passionate about the work he does day to day. The things he works on at LGT and Lightrock drive him, because he believes that this work is what is needed in this world.


The values of a Princely Family

What are the values of the Princely Family that drove Max so early on in his career to pursue impact investing and sustainability? 

“There is actually a very strong and long legacy of the family engaging in business, also in politics, and also in philanthropy, over a very long period of time.”

Having grown up with a legacy of philanthropy, Prince Max’s parents passed on to him a desire and aspiration to become a positive contributor to society. Theirs, Prince Max acknowledges, is a privileged position, one where they have a responsibility to do good things and be a good force for the world.

The family as a whole have adopted a long-term view of stewardship, placing the family fortune in a foundation, and are keen to leave the world a better place than they found it.


Integrating sustainability into LGT

The family business, LGT, has committed to net zero across all operations and investment portfolios by 2030, as well as committing to making everything the company does sustainable too. But how have they integrated sustainability into every product across the bank? 

“This systemic integration of impact is ultimately an ongoing effort and a journey where we all continue to learn and get better and better and better.”

But, says Max, the tone from the top of the organization is essential to the integration of sustainability. It requires ongoing work and special efforts to make sure this commitment stays fresh. Initially, he treated the sustainability pledge with kid gloves, integrating it slowly and carefully into the brand, until he felt they were consistent in their approach.

“I felt if I’m too aggressive, I might be accused of greenwashing. So it has been a journey. I’m quite happy about where we are at this point and hopefully the journey will continue to progress well.”


Transforming philanthropy through a venture capital model

Prince Max launched LGT venture philanthropy in 2007 and is counted among the pioneers in impact investing. 

“When I joined LGT, it had a private banking business side of it, and an institutional asset management business side of it. It was very clear to me that there are actually a lot of wealthy people out there who are willing to allocate capital in a way that contributes to making the world a better place.”

Having seen how his own family had engaged in philanthropic efforts, Prince Max felt that they could do more, and that LGT as it currently was, didn’t have suitable offerings in that area. He knew they needed to create something better, and so he did.

“As always, when you start these journeys, you have a sense of direction, but you don’t quite know where you will end up. It was incredibly rewarding and interesting and has helped to progress LGT in many ways on its broader journey to sustainability.”

The evolution that they’ve been through, says Prince Max, is one which applies to the broader impact investing space. As they’ve gone on, people have realized that impact investing is something where you can actually combine even better financial returns (than traditional investing) with a very positive impact.

This evolution has helped them attract top quality, private equity talent who saw what LGT were doing, recognizing that this was another way of doing private equity. Albeit one that is highly rewarding, both from an impact generation perspective, but also in the way you can interact with the portfolio companies.


Lightrock – sustainable capitalism

Early on Prince Max realized it was better to separate the purely philanthropic activities going into not-for-profit organizations, from the capital allocations to for-profit organizations. 

And so he decided to bring all of their impact investment activities under the roof of a new company, Lightrock. Lightrock is a global private equity platform that seeks to achieve financial as well as societal and environmental returns by investing in businesses that contribute positively to humankind and the planet.

Today, Lightrock manages several billion euros in impact investments and is among one of the largest impact investors worldwide. The organization aims to leverage its pioneering position and experience to scale and mainstream impact investing across asset classes over the next decade.

Prince Max gives an example of one of their early investments in Latin America, a company called Dr.Consulta, a healthcare business in Brazil. Since LGT’s investment in 2014, this company has built up a chain of healthcare clinics that cater to people who can’t afford private healthcare. LGT has invested in several rounds and now Dr.Consulta is a substantial business with over $100 million in revenues. Profitability continues to grow rapidly, as they serve a client base that had not had access to healthcare before.


The world needs a win win mindset

The world, says Prince Max, is in a very tough place at the moment with enormous environmental, social and economic challenges that need addressing.

But what the world needs most is a change in our value systems. He feels they’ve shifted over the last 30 to 40 years, becoming too egoistic, narcissistic, and materialistic at every level – governmental, business, and also the individual level.

“We need to, at all these levels, understand that we are part of a big ecosystem that is incredibly connected. And we need to shift our value systems and understanding and become much more holistic in the way we look at things – more long term oriented, more comprehensive.”

As a collective, we need to engage much more on those activities that have a positive impact on the broader ecosystem, says Prince Max, and to discontinue those that might bring a win for ourselves, or for organizations, but actually, from a broader ecosystem perspective, are detrimental.

“Kennedy famously asked the question: ‘Don’t ask what the state can do for you, but ask yourself what you can do for the state’. We need to applaud more to this type of engagements that bring comprehensive progress. If you applaud more, people will move their hearts because everyone likes appreciation.”

If each one of us in everything we do, says Reynir, always thinks about creating win-win e.g. if I do this, the planet shouldn’t lose. If I do this, society shouldn’t lose. If I do this in one of our companies, the customers shouldn’t lose, the suppliers shouldn’t lose. If the philosophy of creating win-win is in everything you do, all the problems we have will be solved.


What can you do today?

“What is key is that people engage for the good, but take responsibility in how they engage. It is important that the ‘how’ is linked to their own passions, and what gives them motivation, because we need strength and motivated people.”

If we all do something using our own particular skill set, says Reynir, directing our efforts to progress our broader ecosystem, we can bring about change. As Reynir says, everyone should follow their passion, but change is a million new beginnings. So in every small thing you do, think win-win.