People in the News: Earthly Goods
Li Ka-shing boosts his overseas holdings, Björk fights for Iceland’s environment, Pope Francis slams commodities speculation and more.
Is Li Ka-shing Cashing Out?
Hong Kong tycoon-in-chief Li Ka-shing has kept tongues wagging since late last year, when Hutchison Whampoa, his infrastructure and retail conglomerate, announced that it was selling the ParknShop supermarket chain. He later scrapped that idea but unloaded a slew of other assets, including three commercial properties in mainland China, for a total of 12.8 billion yuan ($2.1 billion). Li, whose estimated $31.9 billion fortune makes him Asia’s wealthiest man, is on an overseas spending spree. In recent years his companies have allocated more than $51 billion to the U.K. alone, making him that country’s biggest foreign investor. Li’s sales could destabilize Hong Kong’s economy, charged the Chinese Academy of Social Sciences, China’s leading government think tank, in a recent report that mentioned rumors of a Hutchison withdrawal from Hong Kong. Li, 85, called the accusations a big joke, but analysts say he’s just playing smart, especially with Hong Kong real estate prices at record highs. “Even Tokyo is cheaper than Hong Kong,” notes Paul Schulte, CEO of Schulte Research International, a Hong Kong–based research firm. — Allen T. Cheng
Full Steam Ahead for Björk
Björk’s latest album is titled Biophilia, and the nature-loving pop star puts her money where her mouth is. Famous for its hot springs and glacial rivers, Björk’s native Iceland has recovered from its 2008 banking meltdown with help from tourism. But another growing industry is raising hackles: Environmentalists fret that aluminum smelters — the island nation has three, owned by foreign players Alcoa, Century Aluminum and Rio Tinto — will sap local geothermal power before it can replenish. Björk, 48, shares those worries. “Even venture capitalists here now understand that our future needs to be in nature, not destroying it,” she told the U.K.’s Guardian newspaper. The singer has venture capital connections: In 2008 she and Icelandic firm Audur Capital announced the BJÖRK fund, a 100 million krona ($809,000) green-technology vehicle that failed to close. In March, Björk cohosted a Reykjavík concert that raised Kr435 million to carve out a national park in the center of Iceland. — Anne Szustek
Bob Steel, Man of Steel
Asset managers are getting wise to the value of having the ear — and the pulse — of policymakers. In new CEO Bob Steel, Perella Weinberg Partners, the $11.5 billion, New York–based boutique asset manager and investment bank, has someone with Wall Street, Washington and civic government experience in its corner. Investing is increasingly affected by policy decisions — witness the battle between investors and the U.S. government over mortgage giants Fannie Mae and Freddie Mac. Having headed U.S. bank Wachovia from 2008 to 2010, some of the toughest years of the subprime crisis, Steel knows this area well. Such expertise can help Perella with its asset-backed venture strategy, which invested deeply in the mortgage market and elsewhere. Most recently New York’s deputy mayor for economic development in the Mike Bloomberg administration, Steel also served as Treasury undersecretary for domestic finance during George W. Bush’s presidency. From 1976 to 2004 he worked at Goldman Sachs, where he rose to vice chairman. Steel, 62, takes over from PWP co-founder Joseph Perella on July 7. — Imogen Rose-Smith
Harvard Management Co.: Help Wanted
In June the educational endowment world held its collective breath at the news that Jane Mendillo, president and CEO of Harvard Management Co., plans to leave by year’s end. Mendillo, who arrived at Harvard in July 2008, when the markets were going into free fall, spent six years rebuilding the fund after it lost $10 billion of its $36 billion in assets. Undergraduate Harvard College admitted just 5.9 percent of 34,000-plus applicants to its class of 2018, but when it comes to heading the now-$32.7 billion, Cambridge, Massachusetts–based endowment office, willing candidates are in short supply. When Jack Meyer announced his departure in 2005, after 15 years, it was nearly a year before emerging-markets bond manager Mohamed El-Erian left Pacific Investment Management Co. to take the reins. In 2007, Harvard began a lengthy new search that brought former Meyer protégé Mendillo, 55, back from her job as CIO of Wellesley College. She’s now set off yet another round of Guess Who’s Coming to Cambridge. “This is Harvard,” Meyer says. “It’s intense.” — Frances Denmark
Pope Francis on Higher Returns
What does impact investing have in common with the acts of two fourth-century Christian martyrs? All are testaments “to the transience of earthly goods,” according to Pope Francis. In a June address at a Vatican symposium called Investing for the Poor, coinciding with the feast day of mother-and-son saints Julietta and Quiricus, the 77-year-old pontiff sang the praises of impact investing. Conceding that returns might be “more moderate” than those from other vehicles, he said impact investing “acknowledges the ultimate connection between profit and solidarity.” But the head of the Roman Catholic Church condemned speculation on agricultural commodities as a “scandal” that can deprive the world’s poor of food. Speaking of scandal, Pope Francis recently sacked and replaced the five-person board of the Financial Information Authority, the regulatory watchdog for the Vatican’s bank, the Institute for the Works of Religion, in response to alleged money laundering by former top IWR officials. — A.S.
Mike Richter Saves the Environment
As goalie for the NHL’s New York Rangers, which made it to the Stanley Cup finals for the 11th time this year, 1994 Cup winner Mike Richter was known for big, timely saves. Since hanging up his skates in 2003, Richter, 47, has turned to backstopping the environment. He earned a Yale degree in ethics, politics and economics with a concentration in environmental policy before co-founding a $100 million, resource-efficiency-focused private equity fund in 2007. Richter now heads Healthy Planet Partners, which retrofits buildings and facilities with clean, renewable power. Calling Greenwich, Connecticut–based HPP an outsourced chief energy officer and a green bank, Richter admits that eco-friendly investments are perceived as risky. But as he points out, clean-energy technologies such as solar have long track records. Richter also notes a link with his old career. “It’s about performance,” he says. “We’re trying to get buildings to perform better in every way possible.” — Ben Baris
The Scott Evans Investment Trend
New York City Comptroller Scott Stringer has wasted no time in putting his stamp on the $150 billion city pension system. Take his recent appointment of Scott Evans as CIO. This job, which also carries the title of deputy comptroller, has traditionally gone to someone with a political background. Stringer’s predecessor, John Liu, was the first New York comptroller in recent history to name a CIO: Larry Schloss, who previously headed his own private equity firm and has a long track record as an asset manager. Schloss left the New York City Employees’ Retirement System last October, shortly before Stringer, formerly Manhattan borough president, won election to his current post. Evans, 55, is another investment veteran. He spent 27 years at TIAA-CREF, the $487 billion, New York–based financial services firm that got its start managing teachers’ pension assets, where he rose to president of asset management before retiring in 2012. — I. R.-S.