As CEO of the Future Generation Global Investment fund, Louise Walsh heads up a unique investment opportunity that deeply benefits the social community. The fund, which raised $302 million in investments prior to its public listing last September, will give 1% of its net assets to youth mental health causes every year – and predicts that figure will only grow.
Here she explains how the model was adapted from a pre-existing fund in London and why the youth mental health space was chosen as the fund’s focus.
If there’s one thing that I wish business leaders and entrepreneurs interested in giving would understand it’s that business is about being creative and innovative in their giving as well, and that sometimes that means seeing potential in ideas that exist elsewhere in the world, or in other marketplaces.
North America, the UK and the rest of Europe tend to be more progressive in the space of business for good. It’s time we got out there, researched, talked and adapted ideas.
That’s how Geoff Wilson established the Future Generation Investment (FGX) and Future Generation Global Investment (FGG) funds – unique investment propositions, the latter of which is set to be Australia’s biggest funder in youth mental health other than the government.
Finding inspiration overseas
About five years ago Geoff was holidaying with his wife Karen, in London when he read about an investment vehicle called The Battle Against Cancer Investment Trust in the Financial Times. Intrigued by the concept, he decided to meet Tom Henderson, the man behind the Trust.
Tom had convinced a group of hedge-fund managers to waive their usual management and performance fees and manage a portfolio of investments on a voluntary basis. As a result of the fund managers’ generosity, the Trust pledged to donate 1% of its net assets to charity every year.
That Trust is now worth £440 million and gives away £4.4 million a year to charities including half of it to a cancer research charity. If those non-profits continue to meet the KPIs established by the Trust, they will get that funding on an ongoing basis – and the funding will increase over time. It’s an incredible model.
Applying a tried and tested model
After his meeting with Tom, Geoff came back to Australia and said, “I’m going to replicate that exact model in Australia one day.”
The FGX fund was listed on the ASX in September 2014 and a group of Australian fund managers, including Geoff’s company Wilson Asset Management, agreed to waive their usual management and performance fees to manage a portfolio of investments in Australian equity.
It was incredibly successful. Geoff thought he’d originally raise between $20 and 50 million but the fund was oversubscribed at $200 million – resulting in close to $2 million donated to 14 youth at risk charities from the outset in 2015.
Making the model global
After that time, a lot of investors said to him, “Can you do a global-equities equivalent of Future Generation?”
Around the same time I was preparing to finish up at Philanthropy Australia, and Geoff was straight on the phone. He told me, “I’ve launched FGX successfully and now want to do a global equivalent. I think you’re the perfect fit to come on board as CEO of the new vehicle. I need you to help me with the capital-raising and the charitable focus.”
We successfully raised $302 million, making Future Generation Global the second biggest listed investment company in Australia to date. And as a result of us raising those funds, we’ll start by donating $3 million a year to eight non-profits focussed in the youth mental health space.
Picking the charitable focus
We decided to fund the youth mental health space because of its chronic shortage of funding. Only 7% of the federal government’s health budget is devoted to addressing mental health issues. Based on the size of the issue, it should be at least 14%.
Private sector support is also low because of the stigma associated with the confronting nature of many mental health issues. It simply isn’t very popular among corporate and philanthropic funding. We want to transform that.
We asked interested non-profits to develop detailed five-year proposals about how they would spend the donated money. For instance, Headspace, which is one of the chosen non-profits, will focus their funding on employing indigenous mental health workers to work in specific remote areas of Australia.
With The Butterfly Foundation, the funding will enable them to bring an intensive residential program for young people with eating disorders to Australia. Up until now, you could only get access to that program in Los Angeles – and you had to be wealthy to do so.
The exciting thing is that over time the company will develop into a $1–2 billion company giving away $10–20 million a year. Within two years – so by September 2017 – shareholders will be given the opportunity to exercise their options. That means that the company will potentially double in size in two years’ time.
Instead of being a $300 million dollar company, it will be a $600 million dollar company giving away $6 million. And then there will no doubt be more options that will be available for shareholders to purchase in the next five to 10 years, and there’ll be capital growth as well.
It will definitely be the biggest funder in youth mental health other than the government.
Want more? Discover what Louise learned about giving.
Future Generation Global Investment Company is the first internationally focussed LIC (Listed Investment Company) to provide shareholders with diversified exposure to selected global fund managers while changing the lives of young Australians affected by mental illness. FGG, which donates 1% of its net assets to eight youth mental health non profits every year, was valued at $302.1 million at its IPO in September 2015.
Photo credits: FGG, Unsplash