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CHATS: Impact Investing: Reshaping Private Markets

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On this CHATS segment of the "Financial Perspectives" podcast, William Reynolds hosts a dynamic conversation with Josh Hile - CEO of Citizen Mint - as they explore how impact investing in private markets is transforming the investment landscape by delivering competitive financial returns while addressing critical global challenges. 

The traditional investment paradigm has long separated profit-seeking activities from philanthropic endeavors—but that's changing rapidly. Josh explains how younger investors are rejecting this binary approach, instead seeking investments that generate returns while creating positive outcomes for society and the environment. This shift coincides with extraordinary market opportunities in sectors addressing urgent needs like renewable energy infrastructure, affordable housing, and innovative private equity structures.

We dive deep into the compelling risk-return profiles of impact investments that challenge common misconceptions. Renewable infrastructure investments typically deliver 12-14% returns with half the volatility of public markets. Affordable housing can achieve 15% IRRs with remarkably stable tenancy and recession-resistant characteristics. These aren't concessionary investments—they're powerful portfolio diversifiers that happen to create meaningful positive change.

The conversation explores how artificial intelligence is dramatically reshaping energy demands, creating unprecedented opportunities in sustainable infrastructure. By 2030, US data centers alone will become the sixth-largest energy consumer globally, driving massive capital deployment toward renewable energy solutions.

Whether you're an experienced investor or just beginning to explore how your portfolio can reflect your values, this episode provides actionable insights into an investment approach that refuses to compromise between purpose and profit. Listen now to discover how private market impact investments could transform your portfolio while helping address society's most pressing challenges.



If you'd like to learn more about the show, have a topic or speaker to suggest, or would like to leave us a comment, email podcast@cfa-sf.org.


This podcast is produced by CFA Society San Francisco, a not-for-profit professional association, providing professional learning and career resources to over 13,000 investment industry professionals worldwide. To learn more about CFA Society San Francisco, visit our website or connect with us on LinkedIn.

The information contained in this podcast does not constitute financial or investment advice. Please consult your own financial advisor for information concerning your specific situation.

Lindsey Helman:

Hello and welcome to this month's chat segment of the Financial Perspectives podcast. Our chats episodes feature dynamic conversations between industry experts from some of our recent and most popular webinar recordings. This month you'll hear from Josh Hile and William Reynolds as they discuss impact investing in private markets and William Reynolds as they discuss impact investing in private markets.

William Reynolds, CFA:

Good afternoon everyone, and thank you for tuning in today to our webinar titled Impact Investments in Private Markets. Before we dive in, I'd like to quickly just introduce myself. My name is William Reynolds and I'm an investment associate at Fire Capital Management, as well as a member of CFA Society, san Francisco and volunteer member of our Young Leaders Council. In my role with Fire Capital, I assist in managing client portfolios and supporting the investment team in making informed decisions by evaluating and presenting updates on investments, market trends and industries. I also play a key role in maintaining client relationships and developing investment strategies that align with clients' financial and impact-r elated goals.

William Reynolds, CFA:

N ow. I'd like to introduce our esteemed speaker today, Josh Hile. Josh Hile is the CEO, cio and co-founder of the private market investment platform, citizenmint. Josh has spent the last 10 years managing and consulting ultra-high net worth individuals, as well as pensions and 401k plans of Fortune 100 companies. Prior to co-founding CitizenMint, josh was the Director of Investment Strategy and Research at Laird Norton Weatherby, a $16 billion RIA, where he was instrumental in developing and maintaining and improving impact and sustainable investing capabilities for both public and private markets. He was further responsible for worldwide sourcing, ongoing due diligence and monitoring of all equity asset managers, as well as real estate, private equity, private debt and venture capital opportunities, and prior to this, josh worked at Russell Investments, performing due diligence on fund managers for Russell's mutual fund and consulting divisions.

William Reynolds, CFA:

Mr Hile has a BA in business administration and an MBA from the University of Washington's Foster School of Business, and, in addition to that, josh is both a CFA charterholder and certified public accountant. Josh, thank you so much for joining us today, and I'm personally thrilled to discuss today's topic of impact investments in private markets. Thank you so much. So excited to be here Awesome. Well, before we dive into the particulars of today's subject, I think it'd be helpful if we set the stage for the audience, and by that I think it'd be helpful if we differentiated to what the differences are between traditional sustainable and impact related investments from a high level.

Josh Hile, CFA, CPA:

Yeah, definitely so. In traditional investments, you're going to focus on maximizing financial returns on investments, with little concern of the negative externalities of those investments.

Josh Hile, CFA, CPA:

So that's the number one, you're just trying to get as high of returns as possible. It doesn't matter what you're doing and you just don't care. In the second, which would be like sustainable buckets, you're investing in companies that reduce risk and increase value through thoughtful consideration of all stakeholders, so you're incorporating employees, you're incorporating customers, local communities, shareholders, while limiting the negative externalities on society and the environment. And you can think of this in even like you're treating your employees well, you're doing well within your communities, which helps your brand image, which is something that's not necessarily measured on the balance sheet, but it is something incredibly important to a business over time. And then the third category or bucket is impact investing, and these are investment opportunities, which are often in the private markets, that seek to solve an environmental or social challenge while also trying to maximize financial returns. And some people might think of impacted investing as philanthropy. It doesn't need to be and it's supposed to be totally separate, because you're really still trying to maximize those financial returns within that marketplace.

William Reynolds, CFA:

Yeah, and I think that's a great overview and I guess let's dive a little deeper into this. So the, particularly as it relates to impact investing, where you said, there doesn't necessarily need to be the philanthropic arm to it. There's also the you could say, market return rate sort of investments. What would the differences in philosophies and objectives be for these different types of investments as it relates to that?

Josh Hile, CFA, CPA:

Yeah, and I think you know, with the objectives on impact investing and I'll make sure I'm actually going to share my screen just to show you a little bit what this can look like, you a little bit what this can look like. So, oops, one second, there we go, so you can kind of see the broad based and like sustainable investing can kind of be encompassed in that SRI, esg based, thematics ESG. That can kind of go across that sustainable investing universe. But the different philosophies and processes really on the impact investing side, you're really mostly going to look at that in private markets.

Josh Hile, CFA, CPA:

Traditional investing can be in equities bonds but also private markets within that, but taking a broad based approach of like, hey, we can go invest in something that might be detrimental to the environment, might be detrimental to society, but we are just trying to get the highest returns for our potential investors. So I think that's one of the differences in the philosophy base, whereas impact investing comes from it of like well, first of all, it has to be a great return investment for us to get involved. So you start kind of at the same place where in traditional investing, in sustainable, normal investing and impact investing, you're like we still want to maximize returns. But then you kind of dive deeper into like for impact investing. Is this actually having a positive impact on society? After you have that first level of diligence on like, is this also just a good investment to get into?

William Reynolds, CFA:

Perfect, and how would you say that the demand for these forms of investments have grown over the past two decades?

Josh Hile, CFA, CPA:

It's been rather significant in the demand side of things, as people have thought about or even understood what their underlying investments are actually doing, and so you know we like I'll show you kind of a demand chart but it's actually one of the fastest growing segments in financial markets. If you just think about how much money is going into this. A lot of this does have to do with kind of this transition of energy and because there is so much money moving into the infrastructure market where we need to find replacements for energy or other parts of infrastructure, but also it's also related to just like the biggest issues we're facing out there need a lot of capital, whether it's in climate change, specifically energy, whether it's in education, healthcare, affordable housing. So it has been a place where people have been looking to put more capital because the opportunity set is so massive, and whenever there's a massive opportunity set, all investors start paying attention to that.

William Reynolds, CFA:

And before we dive into a little bit more about the asset classes, which you've already kind of alluded to there. But in terms of generationally, I would say that the problems that were faced by the older generations may not be the same problems that the younger generations may be more so valuing and or focusing on at the moment. How have you seen clients and financial advisors representing their clients approach you and Citizen Mint as it relates to value alignment with their investments?

Josh Hile, CFA, CPA:

Yeah, I think one of the big things is younger generations are much more attuned to essentially thinking about how their investments are going to impact society From a taking a step back. So I was at a large wealth manager. Most baby boomer clients think of their money in two buckets. They think of their profit generation, they and then they have their other side, which is their philanthropy. They don't like to intermix those and they don't care if they're against each other. So you could be like, hey, I really care about this issue and even if that issue is something they're essentially creating negative externalities for in their profit-making center, it's like, well, I'll just put money into my philanthropy center to offset that, whereas future generations, or essentially millennials, are essentially saying, well, actually I want those two to interconnect and I want to do good at the same time as my investments are doing good and not have these negative externalities and have to put money more money into philanthropy to offset my negative externality.

Josh Hile, CFA, CPA:

So just a big mindset shift and I think I would just I'll pull up, you know, kind of a couple things here just because I think they're important. You know, this younger demographic are really looking at their investments and saying, okay, well, I want more alternatives in my portfolio, I want more sustainable things in my portfolio, so like that's what I want to have. Also, what we've seen is the wealthier the person is at wealth management firms. In a lot of cases, some of the biggest or largest clients at certain wealth management firms are actually some of the most impact oriented, and so we've seen wealth managers either lose clients because they don't have enough impact or capabilities within that marketplace or, in the case of other wealth managers, have really built their business on the back of having this capability whether it's Laird.

Josh Hile, CFA, CPA:

Norton Weatherby, whether it's Altititaman, whether it's Jordan Park, some of these big wealth managers within the space that are highly well respected, that have these big impact sustainability capabilities and they've been able to grow their business quite significantly because of those capabilities internally.

William Reynolds, CFA:

Yeah, and I could personally say that at Fire Capital Management we also adopt a similar philosophy and we hear it as well from a lot of our younger clients particularly, and, yeah, they just like to see you know additional value be made from their returns, so that's really helpful. Thank you, I guess let's go back a little bit. So you already alluded to some of the particular asset classes that you see where there's a lot of opportunity within impact investing, particularly as it relates to private markets. But can you dive a little further or opine as to what you predominantly see in terms of underwriting and ongoing pipeline investment opportunities with Citizen Mint and in your past? Yeah, that's evolved over time.

Josh Hile, CFA, CPA:

Yeah, definitely. I mean in the past you know it was or it see what it seemed like is it was mostly focused on, maybe, the VC universe.

Josh Hile, CFA, CPA:

There was a lot of different opportunities within education or healthcare or other places where it's like, oh, this new technology is going to transform this specific part of the marketplace, and that's still the case. I mean, there's a ton of VC firms that are impact oriented and are looking at those specific big opportunity sets and saying, okay, we can have a big impact here through technology. That said, there's other parts of the marketplace, which is where we really focus. Our focus hasn't been on the VC universe. Our focus has more been on more even real assets a lot of real estate, infrastructure, private debt backed by real assets but we see those things as just massive opportunity sets, and we're not the only ones. I mean Blackstone, kkr, carlyle, apollo. Every one of them is jumping into similar spaces where they're saying, okay, well, we should be looking at energy from a renewable infrastructure standpoint and we should be putting capital work.

Josh Hile, CFA, CPA:

Blackstone's likely going to be the biggest provider of affordable housing in the US just because it's such a massive issue. It's a bipartisan issue where it's like we all know that we need more affordable housing, whether you're on the East Coast, west Coast or in between, and so this is going to be a place that is going to be investable and you look back on it Also, the returns have been very strong within that area of the marketplace and people just haven't really spent a lot of time looking at it. But Blackstone obviously has, and when you're hitting like 15% IRRs for these like affordable housing projects that have almost no downside, that's a pretty good place, like where I want to be playing too. So from a perspective of us, we have really spent a lot of our time in infrastructure, in renewable infrastructure, affordable housing, and then private debt backed by some kind of real asset.

William Reynolds, CFA:

Yeah, and I think, going back to your note earlier about philanthropic versus market rate impact related returns, one particular investment that we've helped with clients is essentially below market rate loans provided to organizations that align with client value. So I think to your point about just the availability of opportunities has grown and more opportunities for value alignment within a client portfolio, which is helpful for wealth managers looking to grow out that sleeve.

Josh Hile, CFA, CPA:

Exactly, yeah, exactly.

William Reynolds, CFA:

Yeah, that's great. And then I guess let's dive a little deeper into the actual due diligence process. So you have a great wealth of experience in due diligence in various assets asset classes, impact, traditional and sustainable due diligence process for an impact related investment, where there is a clear societal or environmental goal to be achieved outside of financial return, differs from that of a traditional investment.

Josh Hile, CFA, CPA:

Yeah, and I mean, I think it really starts roughly at the same place.

Josh Hile, CFA, CPA:

You have a thesis for the marketplace where you're saying, okay, what are what looks like it's going to be an interesting opportunity based on the data set I have in front of me and what is out in the world. And you're saying, okay, there's essentially five or six investable asset classes and which ones look to be the most prominently placed to have a big impact or have a big compelling financial return. And then from there, you know, reviewing what the actual like part of the marketplace that's investable, and then is that a compelling risk reward opportunity?

Josh Hile, CFA, CPA:

So, that even takes away like the impact side of it where we are going down the same place of. Can we maximize financial returns here for unit of risk? And when we say yes then we go to. Is this having a positive impact on the world?

Josh Hile, CFA, CPA:

And then from there. That's like what are the actual investable opportunities beyond that and are these opportunities actually impactful? Or are they greenwashing, where it's not actually having the impact you would expect it to have, or it's actually having a lot of negative externalities. It might have one positive impact but it has tons of negative externalities surrounded about it. But there is that kind of like beyond that from just separating traditional and impact is like making sure that those things that they say they're doing, they're doing.

Josh Hile, CFA, CPA:

So. Just to give you an example, in the case of affordable housing, is this actually have an impact on like new units built? Is this actually have an impact on like new units built? Are these actual people who are living there being impacted positively from where they were previously? So you can review that through, like we the fact you can do tenant surveys to say, okay, how far did you drive before? How far do you drive now to your workplace? How has this impacted your happiness? How much more discretionary income do you have Because this is closer to your work, so you don't have to spend as much on transportation or it's cheaper than the previous place you were living at. All those things that will factor into that tenant's happiness and like the impact you're having with that actual investment.

William Reynolds, CFA:

I think that's a great dovetail into reporting requirements, which is probably a question for many of the audience on the call, particularly as it relates to private markets because, being the nature that it is, it's a little bit more opaque and it's not as transparent as the public markets or companies. So you already alluded to surveying, but what would be other processes or what are the current reporting requirements within private markets, if there are any?

Josh Hile, CFA, CPA:

Yeah, I mean there's no required reporting requirements requirements. There's some big systems out there that larger foundational investors have required when they're doing more institutional investments, like impact management project or IMP, as well as IRIS or GERS or SASB, but most of them have some relation to three key elements. So materiality, so does the investment create material change? And positive change. Measurability can the impact actually be measured? And then intentionality, so is the investment intentionally made to create positive or social environmental impact? Because there's a lot of VC investors out there and I'm sure San Francisco love you if there's any VCs on the call, but they'll be like well, vc is the most impactful part of the marketplace because we create so many positive jobs that are high paying jobs and it's like well, is that actually intentional in the process to create positive impact? Is this actually bringing people out of poverty? Or is this actually a tech worker moving from Amazon to this other job?

Josh Hile, CFA, CPA:

And does that actually create like meaningful, like upward, like impact, but so there's a lot of different systems. That said, there's a lot of ways to measure it and people can measure it in however they want. But that is not too dissimilar from what you can do in public markets and the way you can, you know, increase your ratings from a sustainability perspective by changing the way or your methodology for creating it, as long as you have somebody sign off on that which most people will.

Josh Hile, CFA, CPA:

that's why exxon is rated one of the highest, like um, sustainability companies, um, even though it's like well, are they just hiring more people and having more consultants say that they're self-sustainable, or are they actually having? Are they being positive for the world or not? So there's again. Upfront, though, what we try to do on our side of things is work with the manager to say here are the things we would like to report on, here are the things we require of you to report on on a quarterly basis, and here's like kind of like the discussion on methodology of how we would like you to measure that.

Josh Hile, CFA, CPA:

And then we work from there like reporting that back to our individual investors knowing that you know nothing's going to be perfect and there's errors and estimates, but we're trying to do the best we can and, as long as it's directionally correct, we feel that we can feel good about the impact of that specific opportunity.

William Reynolds, CFA:

I think that also dovetails nicely into a follow-up question on ongoing monitoring as it relates to private investments. So I guess for the audience, particularly within private markets, a lot of these investments are illiquid in nature. So being able to exit a position if something were to change, such as style drift or what have you, then it's not as easily said or it's not as easy as said and done.

William Reynolds, CFA:

And so I guess in that regard, particularly with impact related goals, how does the ongoing monitor process look like from your perspective when you're reporting on these impact-related objectives? It?

Josh Hile, CFA, CPA:

just depends and I'll probably say that a hundred more times because it's so different based on the investment. In some cases it's relatively easy. When you're essentially creating energy from solar or wind, it's tons of carbon emitted. It's a pretty normal metric within the industry. But then we put it into things that people kind of actually understand, because nobody knows what one ton of carbon abated actually means. But when you say you took 100 cars off the freeway for a year by one ton, you know being taken out. Or you took like 50 trips from London to LA out of the network by like similar carbon metrics.

Josh Hile, CFA, CPA:

But those are pretty easy to understand and they're also easier to measure compared to like maybe affordable housing or a healthcare or an education investment where you might have to do some more metrics around, like who you're actually serving, because in affordable housing case it depends on the level of affordable housing, because you could be doing actual low income housing or you could be doing some level between which would be like between 50 to 100% of AMI, and AMIs can range dramatically by the region you live in. In the Seattle region where I'm based, you know, ami is 120,000. And so you might be like, even though you're focusing on retail workers, teachers, nurses, others who can't usually live near their workplace because it's so expensive, those people are still not making what you'd consider as like low salaries when you're making 70 to $80,000 a year. But it's like within that environment.

Josh Hile, CFA, CPA:

It's still hard to live on some of those salaries. So we try to measure it in different ways. I think from you usually don't have because we're not investing in companies or businesses. You don't have the same style drift that you might have with an individual company, where they're changing their whole focus or they're pivoting or they might like get rid of their sustainability programs at any one point in time. That just doesn't really happen with, like, affordable housing or a solar project, even a battery project or whatever it might be within that infrastructure space.

Josh Hile, CFA, CPA:

So you just don't, we just don't see it as often, unless you're doing it with companies, oh, and that makes sense too from that perspective, I guess, looking forward so.

William Reynolds, CFA:

AI has been the craze of you know the news the markets over the past five to 10 years really, and its evolution even more recently than that, has been on a J curve. With AI, there is an energy consumption requirement through data centers and I imagine, in terms of asset allocation for the investment opportunities going forward, infrastructure around that is going to be huge. I guess. Can you speak more about that from what you're hearing on your clients and financial advisors as to how they want to allocate towards that?

William Reynolds, CFA:

you know, future world that we're heading towards.

Josh Hile, CFA, CPA:

Yeah, definitely, and I'm going to bring up my presentation again to show you a little stats around that because I think it's such an interesting topic.

Josh Hile, CFA, CPA:

So AI is going to be revolutionary, I mean obviously, um, it's already starting to like roll into many of the things like we do on a daily basis, um, but like it's going to impact the energy landscape massively, it's also going to impact the renewable infrastructure landscape massively, like it's actually. Renewable infrastructure is going to be huge and renewable infrastructure investments are going to be a huge beneficiary actually actually of AI because you have all these big tech companies looking to have some level of sustainability.

Josh Hile, CFA, CPA:

I mean, they've all essentially said 2030, carbon neutral around that time period, and they're moving as fast as they can towards that and they're putting a lot of dollars behind it.

Josh Hile, CFA, CPA:

They're putting a lot of dollars behind it.

Josh Hile, CFA, CPA:

So all of them have these 50 to 100% energy teams that are constantly trying to figure out how to just get new energy and they're trying to get it from renewable sources in most cases, because that's where most of the new energy is coming from. So they're putting a lot of capital behind it. But, like, ai is a whole nother level step above that of how much energy you need.

Josh Hile, CFA, CPA:

So you need four times the amount of energy to power a normal data center and Mark Zuckerberg came out and just said energy, not compute, will be the number one bottleneck for AI and you already see this. I mean data centers are essentially trying to upgrade to NVIDIA chips and the utilities are essentially saying no, you can't. So that is the number one investable part of investing in a data center center is can it actually upgrade or can it?

Josh Hile, CFA, CPA:

when you build that data center, will it have enough power so that it's attractive to a corporate purchaser to be, able to like be, willing to put the chips there, and so it's a massive problem that we're dealing with right now.

Josh Hile, CFA, CPA:

You saw Microsoft turn on an old nuclear plant. You see Amazon signing nuclear deals as well. I mean, amazon's deal with X Energy essentially is like 10 years out, so it doesn't even have any impact on the current necessity or needs of that company. But you even see, like in 2030, just alone, us data centers will be the sixth largest user of energy in the world. So I mean you're, you're in front of South Korea, brazil, canada, germany, france, just by our US data centers and how much energy we're going to need. That's crazy. And on top of that, like you even see like just how fast the power demands are increasing, and this goes like our power demands were pretty set for a long period of time, and then you had EV come on, you have onshore manufacturing, which is only likely to increase under the Trump administration and the tariff that's likely to go into place, and so you're going to see more and more businesses try to produce domestically.

Josh Hile, CFA, CPA:

I mean it's been a big shift over the last five years already, because we knew we needed to do that. But it's going to go up even further and people don't realize how much energy manufacturing takes. But on top of that you have AI. So these are just the power demand forecasts on this top chart that show how much it needs to increase or how much it's increased.

Josh Hile, CFA, CPA:

That estimate from 2021 to 2024.

Josh Hile, CFA, CPA:

It's been significant. So, all that said is you need new energy, you want it from a sustainable source, and these companies are demanding it from a sustainable source. So, this is going to be a huge opportunity to renewable infrastructure developers and the investors that we invest with.

William Reynolds, CFA:

Yeah, and I think that's all you highlighted all very well. Clearly there's a lot of secular tailwinds ahead for impact related investments, where investors are able to achieve more with their financial resources than just returns, as there's just a clear need on the demand side from an energy perspective In terms of additional high level positives that impact investing can bring to a portfolio. Can you just opine to some of that as well?

Josh Hile, CFA, CPA:

Yeah, and I think one of the biggest is most investors, I think, need to understand there is a lot of diversification benefits for this overall asset class. I mean, I guess, asset sector, not asset class. But these investments say, let's call it infrastructure for one thing, so renewable infrastructure, it has half the volatility of US stock market. It has less than half the volatility of private equity, while producing, you know, roughly around 12, 14% type of returns, net returns to investors based on current Inflation Reduction Act.

Josh Hile, CFA, CPA:

Net returns to investors based on current inflation reduction act like tax incentives as well as just the demand for the underlying opportunities.

Josh Hile, CFA, CPA:

On top of that, it can be tax advantage. If you look at affordable housing similar case, where it's like super low risk, especially in the lower income housing areas, it's like those tenants usually stay there for 10 years at a time, compared to 18 months for a normal market rate tenant. They can increase rents even during recessionary periods based on subsidies provided by the government and other places. They're hitting roughly 15% net IRRs to investors and they have incredibly low risk compared to, like, a market rate apartment. So I think there's a lot of diversification you can get within these specific asset classes. Even you know, one of the opportunities that we saw was in private equity, you know you can do an ESOP private equity fund and you are

Josh Hile, CFA, CPA:

using small business administration loans at much lower rates than the private direct lenders are providing, to, say, the big private equity companies like Vistria and Blackstone. So you're getting like 6% debt rates and you're buying these companies at seven times EBITDA, compared to nine to 10 that private equity is usually buying at, because the founder or the seller actually gets significant tax benefits by selling their business into an ESOP. So lower purchase price on acquisition. You get lower interest rates on your debt, which creates a better return outcome ultimately for investors and lower risk actually, because when you're buying into an ESOP there's warrants attached to it as well as debt. So you're kind of in this in-between risk position between mezzanine debt opportunity and the private equity opportunity. So you usually have lower risk than a private equity opportunity. So I think suffice to say there's a lot of opportunities where you can reduce your risk, diversify your portfolio, but most investors have not been able to see that through the noise of what's been going on there politically sovereign wealth funds.

William Reynolds, CFA:

They're typically first movers, especially in the private space, on some of these more sustainable strategies. As it relates to the allocation of your investors that you particularly manage and see within private markets impact investments, would you say it's predominantly corporations, or are you starting to see the ultra high net worth come into the fold more so?

Josh Hile, CFA, CPA:

Yeah, I think it's mostly. I mean for us. We do work with some foundations who have been trying to increase their allocations to this to align with their missions of the foundation, where it's essentially it's like well, hey, if we can get investments that are similar rate returns to what we need to maintain our foundation indefinitely and it more aligns with our mission of our foundation, then we should be doing that and I think there's more and more foundations that are looking to do that within their portfolios.

Josh Hile, CFA, CPA:

From a corporation perspective, it goes the same way, but, that said, we're mostly dealing with ultra high net worth individuals on our platform and wealth managers and their clients who want to? Align their values.

Josh Hile, CFA, CPA:

In a lot of cases, though.

Josh Hile, CFA, CPA:

I mean, we work with a lot of wealth management firms who are just excited about the returns, and probably about 70% of the wealth managers we work with. A lot of them don't care about impact or their clients, but the returns are so compelling and the risk is much lower than in other places in the market to diversify client portfolios here that it just makes a lot of sense for them, and so that's, I think, where we can still have a positive impact on our end. But then they're getting diversification and hitting their clients' financial goals, which is a win-win for everybody.

William Reynolds, CFA:

Oh, that's really interesting. We got a question in from the audience here. So, josh, I'm curious if maybe you have an outlook on this. But, given a federal policy particularly going forward, how much do you think that will impact energy generation in the US and its mix between renewable, traditional or nuclear, and or do you see this being more of an economic decision?

Josh Hile, CFA, CPA:

Yeah, I. So this is a that's a softball to what you really want to ask, which is is Trump going to take out the Inflation Reduction Act, which should be the real question, and so what I think? I mean, we've opined on this with a lot of experts within the field and it's likely going to be more a scalpel approach or a rebranding approach compared to an actual full repeal. First of all, it's really hard to repeal that big of an act. Secondly, it's and I don't have the chart like in front of me, but I'll probably follow up on it but it's essentially benefited mostly red states.

Josh Hile, CFA, CPA:

I mean the Inflation Reduction Act has been the biggest boon for red states and oil companies because they are actually huge renewable energy providers as well. So of the 200, and I have this chart but of the 225 billion spent and this was several months ago $190 billion had gone to red states. So Texas is the biggest renewable energy provider in the US by far, by far, way bigger than California and the future projects are way bigger than California. Texas relies on 35% to 45% of its grid on solar wind energy. You can look it up on ERCot and see their daily mix and most of the production of new jobs. So for solar, for EV manufacturing, for onshoring of like, like. Actually the solar arrays is going on in Ohio, north Carolina, on batteries, north Carolina, alabama, louisiana and Texas.

Josh Hile, CFA, CPA:

So, those are all red states, based on most recent data. So is Trump going to destroy jobs? Probably not. He's probably not going to try to destroy jobs, especially in Texas. Doesn't really want to mess with Texas.

Josh Hile, CFA, CPA:

On top of that, elon being part of the new administration in not a formal role, but we know he's there, so it's likely that he wants those things to stay in place because they're hugely beneficiary to the profitability of Texas. I mean, people forget that Tesla is one of the biggest battery producers in the world and so on top of that they have a residential solar and on top of that they get massive tax credits through selling EVs cars. So you would really like if they took out a lot of those incentives.

Josh Hile, CFA, CPA:

Tesla is probably down 30%, maybe 40%. So I just don't see it happening and most, even like Republicans don't like who are experts on this topic don't see it happening even like Republicans, don't, like who are experts on this topic. Don't see it happening. I think it's also going to be an economic decision, to your point. Because, essentially, you already have oil at $70 a barrel. Natural gas is super cheap. It's unprofitable to drill for new natural gas because people will be like natural gas, isn't we should?

Josh Hile, CFA, CPA:

just drill more, and it's like well it's unprofitable, so why would you drill for? And it's's like if you drill a ton more oil and you're going to drop it to 50, then it becomes unprofitable for oil companies. So it's like we're not going to do that.

William Reynolds, CFA:

So it is an economic decision.

Josh Hile, CFA, CPA:

At the end of the day. Now, nuclear is still 10 years out. At the very earliest, it is going to be part of the solution and they're going to work to add it in. But there's, it takes a long time to put nuclear in place, even like small modular, because people don't want nuclear near their homes. Even though it's mostly safe they don't.

William Reynolds, CFA:

They just don't want it near their homes yeah, no, and I think that was a great um. Just to overview on the overall broader implications of, uh, what federal policy has to take into account as it relates to future energy generation. So, yeah, great points. Well, I do believe that answers all of our questions that we have for the call, and we're nearing the end here. But, josh, if there's anything else you just may want to add prior to you know logging off here, I'll leave the floor to you right now.

Josh Hile, CFA, CPA:

No, I think we'll follow up with some resources that you can look at. You can look at citizenmancom, where we have a ton of white papers on different parts of the marketplace and try to dive deep into each one of those. We also put up a lot of blogs around things like new administrations coming in, where we try to provide expert opinions on what individuals are saying about it and what part of the markets are investable, what parts aren't. That you can look at and happy to answer any additional questions.

William Reynolds, CFA:

Awesome. Well, thank you so much, josh, for your time today, and thank you everyone that's listening in and I'd like to you know. Wish you all a great rest of your day, Thank you.

Lindsey Helman:

Thank you for listening to this month's chat segment. Chats is a monthly segment featuring audio from our recently recorded webinars airing on the second Tuesday of the month. To view the video recording of this episode and discover additional society webinars, visit the CFA Society San Francisco YouTube channel. Join us next time for our regularly scheduled Financial Perspectives podcast episode airing on the last Tuesday of the month, and make sure to send in a message to the show using a link at the top of each episode description or by emailing podcast@cfa-sf. org We'd love to hear what you think of our new chat segment or any suggestions on future topics you'd like us to cover. Thank you for being a dedicated listener. This podcast is produced by CFA Society San Francisco, a not-for-profit professional association providing professional learning and career resources to over 13,000 investment industry professionals worldwide. To learn more about CFA Society San Francisco, visit our website at cfa-sf. org or connect with us on LinkedIn.

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Tanya Suba-Tang

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Lindsey Helman

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