Owen Matthews started a publicly-listed company in university, joined his family’s technology investment firm, Wesley Clover where he worked alongside his father, Sir Terry Matthews, and eventually launched The Alacrity Foundation in Victoria, B.C., elevating start-ups to scale-ups and beyond. Now he’s beginning something new: Emend Vision Fund, which invests in high-potential early-stage companies focused on environmental and sustainability impacts.
Currently, other families are stepping in to gain access to his Environmental, Social and Governance (ESG) investment opportunities too.
“I’m very, very committed to what I’m doing, and I’m sure that resonates with other people,” Matthews says.
The Financial Pipeline spoke with Matthews about impact investing, clean tech start-ups, traditional industries – and how high-net-worth investors can make sense of it all.
The Financial Pipeline: You’ve had plenty of success with Alacrity in the past 15 years. Why focus on clean tech, impact investing, and launching the new Emend Vision Fund now?
Owen Matthews: I spent a lot of time listening to customers about impact on the environment. And the more I listened, the more it became obvious that massive, multi trillion-dollar industries – the energy sector, mining, agriculture, water treatment, and critical infrastructure – they don’t change very quickly, but are desperate for change. They’re under enormous pressure, from regulators, customers, investors, and internal ESG mandates. But they’re not generally innovative.
We refer to it as ‘industrial transformation.’ You’ve got all of these massive industries wanting to behave better, but they don’t really understand how to innovate and change because they’ve been doing the same thing for a long time. Our job is to help them change. There’s a massive amount of demand for it. ESG is the largest venture opportunity that I’ve ever seen.
FP: And investing in start-ups can lead to helping large industries evolve?
OM: Coming up with a brand-new, hydrogen-based vehicle might take 20 years or 30 years to really make a difference because it’s an entirely new industry. But going to an existing industry and stopping their most damaging behavior could make a big difference faster. They’ve already got huge purchasing power and massive market caps. They can acquire technology by acquiring companies. So, you start where the biggest polluting challenge is, you help them to behave better, and you’ve got this amazing venture opportunity.
FP: Why should wealthy or industrial families follow your lead and focus on impact investing? Why not just make a difference through philanthropy?
OM: Traditionally, a good family would be philanthropic and give money away. And I applaud that kind of behavior. However, I feel the biggest impact I can possibly make is to take all of my skills, experience, money and connections and apply it to something I feel will not just solve a problem with money but solve it with a product I bring to market and has an enormous leveraging effect. In other words, I can give away a million dollars to somebody that sequesters carbon, or I can invest a million dollars in something that helps the planet and creates jobs. And if it works well, I can turn that into something that does a billion dollars in revenue. Not only have I made a pile of money for my investors, but my one million dollars has had an industrial transformation impact.
FP: When you’re talking with multi-generational business families, how does this focus on innovation and change play out?
OM: The senior generation wants the younger generation involved in their business. The younger generation wants to change things. So, we’re turning to the senior generation and saying, ‘If you don’t change, you won’t be as competitive. It’s what your customers want, and it’s what your investors and regulators want. Let’s show the younger generation how to get involved in big industry.’ The senior generations are overjoyed and the younger generation are getting involved, but they’re doing it in a responsible way that is about making the business more successful.
FP: Is impact investing in early-stage companies for everyone?
OM: To be good at early-stage investing, you have to do an enormous amount of work. Thankfully, I love what I do, and I’ve surrounded myself with people who also love that world. But it’s very different from writing a cheque and showing up at quarterly board meetings. I’m constantly dealing with problems. I’m surrounded by people that work hard. And I’m constantly filling in for management teams or coaching young entrepreneurs through lots of complicated problems they haven’t experienced before. That, to me, is very, very rewarding. But if you’re not very knowledgeable about the early stage or actively engaged in it, it’s not the kind of place you should put your money.
FP: Or you can invest in a fund like Emend?
OM: Or you put it in a fund. The Emend investor is someone who believes in what we’re doing, likes what we’re doing, wants to be involved with us, and maybe wants to learn from us. If you are the kind of person that likes to do that as well, great. We’d love to partner with people like that, especially industrial families. And we can invest in projects together. But if you are accustomed to doing huge projects and not early stage, then you should probably look at later stage investing. Later stage is the right thing for a lot of people, but it doesn’t drive as much change. I feel the early stage is the biggest impact you can make.
Read more about how family offices are talking on ESG challenges at CanadianFamilyOffices.com.
