The Most Fascinating Impact Investor You’ve Never Heard Of

Matthew Weatherley-White surfs, skis, cycles and manages a $3 billion investment fund

“I’m committing my career and professional reputation to this notion that at some point in the future it will be unacceptable to deploy capital with utter disregard to the environmental and social consequences for doing so,” Matthew Weatherley-White says, hair still damp from the Pacific. “That doesn’t mean every single business is going to do impact investing. That’s a stupid conclusion. But to me, internalizing those externalized costs, that’s the North Star.”

Even at 7 a.m. on a weekday morning with a lackluster swell, scores of black-suited figures have gathered, bopping up and over mellow two-foot waves. Every few minutes one pops up, stands on a board and rides out the break. It’s a classic California June Gloom day that’s more Gloom than June at Blackie’s in Newport Beach. Middle-aged (and older) men and women with leathery skin pull on wetsuits next to 20-somethings doing the same. And then there’s Matthew Weatherley-White. Standing a little north of six feet, with deep dimples and salt-and-pepper hair pointing in every direction, he’s part Wall Street, part Dr. Oz. In a suit he looks his profession. Slap a surfboard under his arm and the persona changes to who he truly is: the most fascinating impact investor you’ve never heard of.

You won’t find many investors running multi-billion-dollar investment funds catching waves on a Thursday morning, or any morning. But there aren’t many people anywhere like Weatherley-White: The son of an English physician and a “Colorado capitalist hippie” mom, Weatherley-White’s existence seems unlikely. Yet here the 52-year-old is — the product of two seemingly polar-opposite parents.

Weatherley-White wrote an opera as a sixth grader, then convinced his class to perform it. He has competed internationally and professionally in five different sports. And he has been known for belting Swedish drinking songs in bars along California’s Monterey Peninsula. He also runs one of the world’s largest and oldest multi-family impact investing funds through CAPROCK Group, the wealth management company he co-launched with five other partners in 2005.

“He’s a modern-day Renaissance man,” says Quintin Reich, a long-time friend of Weatherley-White’s, in a Mediterranean breakfast spot not far from where the two were paddling around the break a short time before. “He’s probably the most talented skier that anyone could possibly ski with,” Reich continues before ticking off a list of Weatherley-White’s hobbies and accolades. Rock climbing. Mountaineering. A world-record holder in rowing. “The list just goes on. I mean, just stop it already,” Reich exclaims across the table.

Weatherley-White shrugs, scooping and shoveling a heaping bite of chicken sausage omelet into his mouth. “He even plays the bagpipes,” Reich continues, voice crescendoing. “He does?” this reporter asks, immediately regretting the inquiry. “Of course he does!” Reich responds. “What kind of question is that?”

He’s right. With such an illustrious and eclectic career — he’s published poetry, worked as a private chef for well-to-do families in Ketchum, Idaho, performed in a thrash punk band (yes, the bagpipes), and pieced together a $3 billion investment fund based almost entirely on personal referrals — it’s safe to assume, no matter what it is, Weatherley-White has either done it or knows someone who has.

THE IMPACT INVESTING BOOM

What CAPROCK, one of 40 founding Benefit Corporations, has grown and morphed into is a microcosm of a fledgling but burgeoning — and radical — way of dispersing capital. “I’m committing my career and professional reputation to this notion that at some point in the future it will be unacceptable to deploy capital with utter disregard to the environmental and social consequences for doing so,” Weatherley-White asserts, hair still damp from the Pacific. “That doesn’t mean every single business is going to do impact investing. That’s a stupid conclusion. But to me, internalizing those externalized costs, that’s the North Star.”

While the North Star has manifested in broad categories of investments, it has certainly remained as a guide. Recent investments have included an undisclosed company providing off-grid solar in East Africa, a New Hampshire-based timber company focused on sustainable timber harvests and a “critical investment” in Community Investment Management, which was the first impact investing firm focused on marketplace lending. Also on the investment resume is solar energy-focused company, Solar Mosaic. CAPROCK has also been the only U.S. investor (so far) to back London-based Althelia Ecosphere, which Weatherley-White describes as “a fascinating, multi-faceted strategy that is helping farmers in emerging markets restore forests, rehabilitate farmland and participate in the global fair trade and organic commodity supply chain, in addition to generating certified carbon credits to support the evolution of the global carbon market.” Through his investment and work on the board, Weatherley-White helped African-facing investment bank, Surya Capital structure the continent’s first utility-scale waste-to-energy plant in Ethiopia’s capital, Addis Ababa. Weatherley-White says the investments he has guided offer market-rate and above financial performance, with returns from 5% to 15% range.

Weatherley-White and CAPROCK certainly aren’t alone on this quest. Last month, the Global Impact Investing Network (GIIN) published the sixth version of its Annual Impact Investor Survey, the most robust bounty of data of its kind. And the numbers were frothy. From 2014 to 2015, impact investment deals leapt from about 5,400 to 7,500, with a planned jump to just under 12,000 deals this year. At the same time, the total worth of those deals surged from $10.5 billion to $15.2 billion, with an anticipated amount of more than $17.7 billion in 2016. “Impact investing is no longer a nascent market,” GIIN co-founder and CEO Amit Bouri tells We See Genius.

Most importantly, Bouri says, is that 99% of the 158 responding impact investors reported investments they made were either “in-line or have exceeded their expectations for impact.” Some 89% reported the same for financial performance. “Investors are optimistic about the future of the market,” says Bouri, noting that in the aggregate, respondents plan to increase their impact investment allocations by 16% in 2016. “It has captured the attention of investors and other leaders around the world,” he adds.

Indeed, the buzz of impact investing has transcended cultures, nationalities, and industries. Those championing the phenomenon have included (but are certainly not exclusive to) the White House, finance behemoths such as Bain Capital and Goldman Sachs, massive foundations including the Rockefeller Foundation, and high net-worth families and individuals such as Hyatt Hotel heiress Liesel Pritzker Simmons. Even Pope Francis recently bestowed a blessing over the field.

AN EPIC PRECURSOR

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Matthew Weatherley-White, right, and Quintin Reich in the swells off Newport Beach. Photo by Diane Edmonds/YourWavePics

At least one driver of the movement is a simple one. “There’s no such thing as an impact-neutral company,” Weatherley-White says. “This reality is, to me, why impact investing is the future of the capital markets.” Certainly the emergence of the field seems as unlikely as Weatherley-White’s entrance into —and dominance of — it. Not because of an unlikely path to success so much as competing life pursuits and passions.

During his childhood, Weatherley-White was woken daily to bedside tea and his father’s strong British accent urging, “Another day, another opportunity to excel.” In the sixth grade, when he was introduced to the ancient Epic of Gilgamesh, Weatherley-White was so fascinated that he followed a teacher’s encouragement and wrote an English rendition of a Turkish operetta version of the epic poem that had been written in the 1960s.

Reminded of his opera, Weatherley-White bursts into a song from the opening score, eliciting laughs and surprise from breakfast companions.

“Gilgamesh! Gilgamesh! Why are you so strong,” he belts, banging his fork and knife against the table. “You say you can beat any man with a single arm. You say that you’ve seen everything and done all there is to do. Part god. Part man. Our powerful king Uruk and high temples for the gods!”

AN EARLY WASP-GUIDED LIFE PATH

Growing up in Denver, Colorado, Weatherley-White’s excellence manifested first in sports and academics. He spent his childhood falling in love with the mountain ranges outside of Steamboat Springs, Colorado and Bozeman, Montana, where his parents owned property. Instead of attending a local high school, Weatherley-White was shipped to Andover, Massachusetts, to the country’s oldest incorporated high school, the Phillips Academy — a school steeped in the founding of the nation. George Washington spoke at the school in its founding year. Washington’s nephews later attended. Paul Revere designed the school’s seal. And John Hancock (of course) signed the school’s articles of incorporation.

But for Weatherley-White, Andover was more than an elite educational experience. It was a coming of age and maturity, albeit a slow one. He also embraces whimsical, sometimes adolescent, humor. “I played the bagpipes in a thrash punk band when I was at Andover,” he says, explaining how their rendition of “Amazing Grace” began with his solo. “And then the guitar would come in,” he continues, excitement growing and voice rising an octave. “And then, ‘Amazing Grace, how sweet the fuckin’ sound!'” For the second time in 10 minutes in the crowded breakfast spot, Weatherley-White is singing. “It was juvenile,” he admits. “But also really fun!”

Weatherley-White was bound, through radical uniqueness and independent thought, to challenge traditions. “At Andover, drugs were a pretty big deal and I never did drugs,” he remembers. “It was there, in that social and academic hothouse, I developed a strong capacity for independent thought.”

A LATER PATH TO SKI BUMHOOD

In 1982, Weatherley-White enrolled at Dartmouth College following recruitment to compete for the school’s alpine ski team and crew. Like many, he discovered his life passions during his transformative undergraduate years. Alpine skiing evolved into Nordic skiing. His poetry was being published. And Weatherley-White scraped an income together by working as a chef at a vegetarian restaurant. “When I graduated from Dartmouth I was pretty sure that I was going to be an adventure athlete who wrote poetry and worked as a private chef to make money,” Weatherley-White recalls.

He set out to do just that. Upon graduation, Weatherley-White huffed it back to the Rockies, where he landed in Ketchum, Idaho at the base of world-class ski resort Sun Valley. That’s when he began cobbling together what he calls a “total dirtbag but wickedly cool life.” He continued to publish poetry, and he also freelanced for the local newspaper, coached skiing, waited tables, folded towels at the local athletic club, and was a private chef for a family. “If I was cooking for them, then I got to eat for free,” he reasons. In the span of about a decade, Weatherley-White had gone from a total WASP life path to ski bumhood. And he loved it.

Until he was troubled by one thing. He began to notice a common population makeup in mountain towns. Generally, there were three camps: the people who had made their fortunes and moved to the mountains to “fill up the moat and pull up the drawbridge,” Weatherley-White explains. Then there were those in the service industry and those piecemeal-ing an income like Weatherley-White. He realized he either didn’t fit or didn’t want to fit into any of the three groups.

VILLIERSDORP, SOUTH AFRICA - Mattew Weatherley White from USA races the last 5 km along the irrigation canals during stage two, of the Absa Cape Epic Mountain Bike Stage Race held in Villiersdorp on the 23 March 2009 in the Western Cape, South Africa..Photo by Sven Martin /SPORTZPICS

VILLIERSDORP, SOUTH AFRICA – Matthew Weatherley-White races the last 5 km along the irrigation canals during stage two of the Absa Cape Epic Mountain Bike Stage Race held in Villiersdorp in 2009 in the Western Cape, South Africa. Photo by Sven Martin/SPORTZPICS

THE UNLIKELY BUDDING OF A WEALTH MANAGER

About the same time, Weatherley-White was asked by Tom Campion to help with research on his doctoral thesis. Also a Phillips Academy and Dartmouth grad, Campion had a law degree and was in the research phase of his Ph.D. in literature and law from Trinity College. At the center of the research was journalist and novelist Theodore Dreiser. A Nobel Prize winner for literature, much of Dreiser’s work is rooted in the belief that the unabashed and blind pursuit of fortune leads to crime and the degradation of society. And with this project Weatherley-White found himself at the precipice of his life’s pursuit.

He remembers presenting what he’d learned about the Gilded Age author. “My thesis was, when you have that level of wealth and income inequality, there is sufficient desperation at the bottom of the economic period to cause people to consider crimes they would not otherwise contemplate,” Weatherley-White says, noting the income inequality during the Gilded Age is similar to what’s taking place in the United States now.

Shortly after, on a bike ride, Campion, who married Lynn Johnson, the daughter of founding members of the multi-hundred-million-dollar Johnson Foundation, made Weatherley-White a life-altering offer. “He said, ‘Look, I like the way you think, you’ve got an innovative mind, it’s creative, it’s unconventional, I’d love for you to come in and be my thought partner on managing this portfolio,'” Weatherley-White recalls. Campion wanted him to conduct original research on asset managers. “I said, ‘I don’t know anything about investing.’ And he said, ‘No, that’s not the point. I want a different perspective. I want fresh eyes on this process.'” Weatherley-White obliged and became an “adjunct part” of Campion’s brain. Also, Weatherley-White wouldn’t have any decision-making power.

A BRUSH WITH BUSINESS SCHOOL

It was now the early ’90s and Weatherley-White had direction. He had purpose. He was succeeding. But just as easily as Campion gave, Campion took away. After two years of using Weatherley-White as a thought partner, Campion had bigger plans for Weatherley-White than Weatherley-White had for himself. “He said, ‘I’m firing you and I’m kicking you out of Ketchum,'” Weatherley-White recalls, a hint of sadness still in his voice. “He told me if I stayed here, I’d never leave. I was so pissed off at him for a couple of months.”

Campion knew that living in a town of fewer than 3,000, Weatherley-White’s sprouting interest in investing and capital markets would be stymied. So Weatherley-White did what many intelligent and well-educated, albeit directionless, 20-somethings would do. He applied to elite business schools. “I thought if I went to business school, I would be given a direction,” he says, noting that he applied to Dartmouth’s Tuck School, Duke Fuqua, Virginia Darden, and Stanford’s Graduate School of Business.

After being accepted to Tuck, Weatherley-White waffled and deferred for a year. When decision time came the following year, matriculation conflicted with an already planned trip to Canada. Weatherley-White deferred again. Two deferments were enough for the Tuck admissions director. “On the third time, she called and asked, ‘Do you really want to come to business school?'” Weatherley-White recalls. “I looked at the mountains and it took me five seconds to say no. But I guess that decision had been building for years.”

Weatherley-White also received some words of advice. “Tom (Campion) said, ‘Matthew, never forget you are constantly in the process of reinventing yourself. And if you ever feel you need to invent the version of yourself that has an MBA, you can always go get one. But don’t let the pursuit of an MBA define who you are.'”

So Campion setup Weatherley-White with multiple interviews. Soon after, Weatherley-White found himself in a suit and tie, jet-setting between Boise and New York City as a broker for Smith Barney.

***

Listening to Weatherley-White, it’s hard to believe he was ever a Wall Street type. He looks Wall Street. But his laugh is too big and his eyes are too kind. It’s tough to imagine him away from skiing a massive line on a mountain or sitting on a surfboard past the break, eyes fixed on the horizon as if he’s contemplating his smallness in the vastness of the Pacific. It makes you wonder if it was a case of mistaken identity — or disillusionment — when he took that broker position with Smith Barney (now part of Morgan Stanley) in 1993.

Nevertheless, Weatherley-White learned quickly that as much as he adored wealth management and helping steward the money of others, he equally despised the Wall Street model. “It’s a pretty soul-destroying experience,” he recalls of the cold-calling portion of his month-long introductory bootcamp at Smith Barney. Placed in a room with “about 100 rookie guys,” Weatherley-White was excited. Until he wasn’t. “I thought, in my naive way, this was going to be an introduction to Wall Street,” he remembers. Instead it was a fear tactic approach, more akin to a military bootcamp. “They paraded these guys in front of us who were supposed to be inspiring,” Weatherley-White begins. “And they had their slicked-back hair and their cufflinks and tie bars and striped shirts with white collars. And they were offensive. They were up there saying, ‘Well here’s how I did it and now I’ve got five flunkies working for me and they’re all pounding the phones getting me appointments!'”

His voice changes from the normal higher octave to something deeper, similar to the entitled jerk in Disney movies who never ends up with the princess. “‘Here’s the way it works,'” Weatherley-White continues, not breaking character, noticing the audience of a friend and co-worker at the table. “‘For every 100 phone calls you make, you’re going to get one qualified lead. And for every 10 qualified leads, you’re going to get one account. And the average account at Smith Barney is $100,000 and you’ll be earning $1,000 of that. So you do the math. How many phone calls do you need to make to be earning $1 million a year?’ And everyone else is like, ‘I don’t care, I just want to start calling!’ And I did the math and thought, ‘Holy shit. I have to make thousands of cold calls to earn a living!’ It was horrifying.”

MAKINGS OF AN EPIC MARKET CRASH

The experience was an omen of a decade-long dichotomy. On one hand, Weatherley-White was destined to manage investments. On the other, he thought the way it was traditionally done was, at best, a mistake, and at worst a steaming pile of deceptions and conflicts of interest.

Perhaps the most notable conflict came in 1999 when telecommunications companies of all sorts were enjoying a major boom. At the helm was Jack Grubman, the former lead telecom analyst for Smith Barney who at the time was the most powerful and compensated Wall Street analyst in history. “If Jack said it was good, it had to be good,” MONEY Magazine reporters Amy Feldman and Joan Caplin wrote in 2002.

In less than two years, telecom companies lost half a trillion dollars. Many blamed Grubman’s deceptive analyses as a contributing culprit. “I remember distinctly in 1999 when Worldcom started to crack, Jack Grubman was pounding the table about why we should all be buying Worldcom,” Weatherley-White says. The reason: Grubman sat in the board room with Worldcom, which Weatherley-White says, hyperbolically, is a violation of about half the Securities and Exchange Commission’s laws.

The deception continued.

“We, Smith Barney, were using this investment banking relationship to capture IPOs to distribute to the businesses that were giving us lots of revenue,” Weatherley-White continues. “But it was just the way it was done. It wasn’t seen as bad. I realized in that moment that my job was actually to protect my clients from the avarice of my employer.”

MWW ski

Weatherley-White ripping a line. Courtesy photo

AN EARLY EXIT

And there was also the internal conflict of doing well for a client and making money for your company. If you work for a publicly traded company, Weatherley-White points out, your primary responsibility is to increase shareholder value. And in the financial services business, he adds, to increase value is to increase revenue to the company. “There is a pervasive, subtle, pernicious conflict between doing the right thing for your client and making money for the company,” he concedes. “And I think we saw that emerge spectacularly in 2008.

“This is not to say the people who work at Smith Barney are unethical,” he continues. “It is to say that the structure of Wall Street is so embedded with conflicts of interest that you can’t escape them.”

Still, Weatherley-White had what he calls a “metaphysical seduction” to building a business and capital, and consequently, to Smith Barney — until it all became too much. “I got to the point where I stopped telling people where I worked because I was so embarrassed by it,” Weatherley-White admits. “It required too much of  a compromise of my ethical being to work there.” So he snagged some partners, one of whom was fellow Smith Barney broker Bill Gilbert, and left. It was 2005. CAPROCK Group had been founded.

***

Impact investing grew out of socially responsible investing (SRI), which some believe has its roots as far back as Biblical times. The modern (and Western) form of the practice can be traced to the tumultuous decade of the ’60s, when human rights, civil rights, and women’s equality earned a sudden spotlight. Ethical labor laws in the ’70s furthered the movement. And the development and integration of environmental, social, and governmental (ESG) investment measures legitimized SRI even more. From 1995 to 2014, SRI assets worldwide exploded from about $500 billion to more than $6.5 trillion.

Weatherley-White became aware of impact investing in 1994 at the Conference on Sustainable, Responsible, Impact Investing in Denver. His blood still boiling over the perversities of traditional Wall Street-style investing, he grew more interested in SRI behaviors. Numerous conversations with other Smith Barney-like firms began and ended rapidly as Weatherley-White desperately looked for a wealth management firm that also aligned with his values. When he couldn’t find it, he and his five partners convinced around 40 high net-worth families (soft minimum of $10 million) to allow them to manage and invest their collective $250 million. After a few years of testing processes and honing organizational structures, CAPROCK throttled up in 2008. From 2008 to now, its client-base turbocharged from around 50 with $450 million in assets to about 115 and more than $3 billion.

“We wanted to start a firm that was different from anything we had seen in the financial market,” Weatherley-White says. “We started the CAPROCK Group to build the kind of firm we’d want to hire to manage our own money.”

RAPID B-CORP AND IMPACT GROWTH

While the six founding members had a broad unifying vision, hashing details over the first few years before growth proved somewhat challenging. When Weatherley-White met the founders of B Lab, the nonprofit behind Benefit Corporation, at another SRI conference in Albuquerque in 2005, adopting the status was a no-brainer. Only B-Corp certification requires an intense audit that examines 200 different aspects of a company. In 2007, Weatherley-White guided CAPROCK through the assessment, where they scored an 82 — two points above the minimum 80 — and became one of 40 founding B-Corp companies. Now more than 1,500 companies based in 50 countries have earned the status, including highly popular and respected companies like Patagonia, Ben & Jerry’s, and Warby Parker.

“We think of it as what every company should be doing,” Weatherley-White says of B-Corp status. “Providing health insurance, paying for your parking, providing coverage for going back to school. We think that’s the responsibility of businesses.”

Up next was convincing skeptical partners to give impact investing a try. While the initial conversation wasn’t hostile, it wasn’t easy either, Weatherley-White recalls. “There was a lot of doubt,” adds Julia Hela, who has been at CAPROCK’s San Jose office for a decade. “Sometimes I don’t think people think it’s possible to help people and the environment and make money at the same time.”

One of those who do was a Montana heiress of industrial fortune who hired CAPROCK to guide her $50 million portfolio in the impact space in 2007. About nine years later, CAPROCK, with offices in Boise, Seattle, San Jose, Park City, Utah, and Newport Beach, manages one of the world’s largest impact investing funds, reaching upward of $1 billion.”So many of our clients are so interested in impact investing,” Hela, who heads up client services, says, noting a specific influx of impact-interested clients at their Seattle-based office. “It’s fascinating.” It helps being headquartered in Boise, she says, where the lower cost of living allows CAPROCK to one-up the majority of its competition, largely based along the more expensive coasts.

CAPITALISM AS THE SURPRISING SOLUTION

There’s no doubting impact investing’s legitimacy. But why now? Are we simply at a moment in history when investment colored by altruism and conscientiousness is the natural evolution in wealth management? Weatherley-White, ever the poet and philosopher, suggests that is the case when he paraphrases a dictum by French novelist Victor Hugo. “Nothing is as powerful as an idea whose time has come,” Weatherley-White says. “The idea of impact investing has met its time.”

What’s next for Matthew Weatherley-White and the CAPROCK Group?

“Trying to figure out a way to make the power of the capital market work to identify, vet, fund, and scale solutions to the great problems that we collectively face and that to date have been ignored by the capital markets,” he begins, moving into lecture mode. “Because policy is not enough. And philanthropic capital is too small. If we’re relying upon this bizarre transmission mechanism between making as much money as you can over here and giving it away to fix the problems you created when you were making all the money, that logic chain breaks. Because this pool of capital is not big enough. To me, the capital markets, which represents, by the way, trillions and trillions of dollars, all it takes is an incremental evolution in the way the markets work to suddenly have an entirely different relationship with these problems. And I’m dedicating myself to that end.

“What’s next? That’s next. The next iteration of capitalism. Capitalism as the solution. The surprising solution.”

*Cover photo by Diane Edmonds of YourWavePics

  • Gore Bolton

    Great article. This is exactly why we started the http://www.piranhatank.com : Calling the Piranha Bottom Line into being: Profit for the people AND the planet.