ESG investing, or buying companies with a focus on environment, social, and governance, is gaining momentum, and some studies show that these companies have outperformed the broad market.
In this interview on Backstage Pass, Prince Khaled bin Alwaleed, CEO and founder of venture capital firm KBW Ventures, explains to Motley Fool contributor Jeremy Bowman why he looks for a social purpose in addition to a return on investment.
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Jeremy Bowman: Another thing I want to mention, we touched on this topic already, but I like the motto at KBW, which is, it's about more than money, much more. I think I have a sense of what that means to you, but I'm just interested to hear you go and explain that a little bit to us.
Prince Khaled bin Alwaleed: Well, that's funny that you say this because we actually have a lot of pitches that really take this code out of context. [laughs] It's about return, but it's much more than money, I get it. But for us, it's a lot more than just investing in a company just for the sake of making money or just for the sake of return. It's also a relationship that we build with the founder. It's also a solution that we want to provide to the planet, if you will. It's a lot more than just a financial return. Those are obviously, but it's not the only thing if you will. We have other criteria that we want to go with, that we want to check off of the box.
But we've definitely had some pitches. It's not about money, is it? So give me money and we're like, [laughs] "That's not what the company is about, we're a fund, it's not a foundation or a philanthropy." That's another arm than we do, but that's definitely not KBW ventures. For us, we like to partner with people that really see a vision in what they're doing and really want to solve a problem that they want to have. Then there's a relationships that we build with them. It's the longevity of this relationship, and it's exploration of new markets that we can open up together, and then we can see the fruits of our labor really translate into a healthy bottom line for the company. That's really what that saying is about. It's a lot more than money for me. It's more of a relationship that I have with the founders and the entrepreneurs.
Jeremy Bowman: [laughs] That makes sense.
