Investing to solve global challenges
In This Podcast
- Why Reynir credits the financial crisis as the transformational point in his life
- How Summa Equity creates value
- How Summa Equity chooses and works with the companies they invest in
- Why Reynir’s passion is problem solving
- How his kids are helping him see the world differently
- Why companies need to unleash the creativity in their organisations
- What Private Equity 4.0 is
Reynir Indahl founded Summa Equity in 2016 at the age of 40, as he turned his back on his successful career in finance in order to focus on being a solution to the world’s most significant challenges.
Investing To Solve Global Challenges
If you were on a successful career path in private equity, would you be brave enough to hop off it and step into the unknown, in order to find a solution to the world’s most challenging problems? Because that is what Reynir Indahl did.
Reynir is the Founder and Managing Partner of Summa Equity, a company dedicated to impact investing in companies that are seeking to solve global challenges.
“We contribute to the value creation by securing growth in our companies and superior returns for our investors. We put our capital and resources to work, helping companies that are instrumental to solve global challenges. We turn challenges into business opportunities and allow companies to grow, while building a sustainable future.”
Fun fact – companies (no matter what industry they’re in) that are purpose driven, focussing on the material aspects of ESG, outperform and create almost twice the returns as companies that don’t have this focus.
With a successful career in private equity laid out before him, Reynir, as he turned 40, turned his back on it. He didn’t want to add to the world’s problems, he wanted to be a part of the solution.
He saw that the challenges the world was facing could create immense opportunities in the financial system and that investors can be a big force for driving change. So he left private equity to work with philanthropy and impact investing, using the UN’s sustainable development goals to screen for companies that are looking to solve those problems.
“I got exposed to how some companies are solving some great challenges, and then I was quite inspired that this is something that all investors should think about. And when the awareness in society grows around the issues that we have, then suddenly the externalities that are the impact that our business has on society can no longer be ignored.”
Be the change you want to see
Before now, it seemed like it was OK to be agnostic, partly because the externalities weren’t large enough, and society wasn’t aware of it enough, especially when it came to environmental problems, for example, social inequality.
But recently, awareness has grown exponentially and where it was once OK to be agnostic to how companies impacted society, now it’s most definitely not.
According to Reynir, there are several challenges for a company if you continue to ignore global problems, or be agnostic about them:
- Consumers will walk away
- You won’t get the best employees
- You’re going to get hit hard by regulations
- You’ll potentially miss out on huge growth opportunities
But the positive impact you have is huge, because you’re solving an issue, for example, health care, waste recycling, agri-food production, three huge sectors which make up over one third of our economy.
The value of competition
In the short space of time that Summa Equity has been in existence, it seems as if the rest of the finance world is beginning to catch up. Summa Equity is now surrounded by other private equity companies funding those businesses who are also striving to seek solutions to global challenges.
And to some it would be frustrating that there is suddenly this competition, but for Reynir, it’s a relief to see that the rest of the industry is finally understanding their impact on the world around them, on ESG (environmental, social and governance) aspects, as well as the impact companies have on society.
“The world has been changing faster than I expected. We were maybe a few months ahead of the curve, not years. So I’m quite hopeful that we can solve some of these challenges if that momentum continues and grows.”
And what the world needs most right now is a little bit of transparency and character, like we publish in our portfolio report. If every company in the world published a non financial report it would create enormous change not least because it would create a focus for the individual company, but it would hold them accountable for their actions.
Reynir shares one piece of advice which might resonate with listeners – for him the most important thing for companies to focus on right now is co-creation in solving complex issues and unleashing the creativity within their organisation, because everyone wants to be a part of the solution.
“Every person has a unique skill. And if you’re able to get everyone to sort of gather around the same issue and come at it from all different angles, and then unleash that creativity and empower the people in the organisation – you can do tremendous things.”
Finally, consider this, Reynir believes that the one thing the world needs most right now is leaders who are willing to step up to the post and pave the way into a new landscape. So, are you going to be part of the problem or part of the solution?
If the talk resonates with you, we’d recommend you listen to this episode too: Simon Sinek