Jean-Paul Paddack, Executive Director at WWF International, discusses his collaboration with Perennium. An interaction started a few years ago within the framework of the largest environmental Foundation in Africa. Why the choice to professionalize the management of the financial assets of such an institution and with what results? Interview.
When did you start working with Perennium and why?
(Jean-Paul Paddack): I met Arnaud Apffel in Geneva to discuss sustainable financing issues, and then as part of a work trip I was carrying out in Madagascar, for the Madagascar Biodiversity Fund (“Fondation pour les Aires Protégées et la Biodiversité de Madagascar“, or FAPBM). I was then a member of the Board of this institution created by the Government of Madagascar, WWF and Conservation International. I participated in the recruitment of Arnaud Apffel, managing director of Perennium, as financial advisor to the Foundation. The fact that he is an asset management professional, having worked in the world of finance for decades, makes him a major asset. But above all he chose, by founding Perennium, to finish his financial career by devoting himself to social and environmental works, while capitalizing on his professional skills. Indeed, I have worked with Arnaud for several years and know his deep and genuine interest as well as his personal conviction for the causes of the Foundations he supports.
Perennium is not limited to the sole role of investment advisor coming from the outside, it feels very much part of the Foundation, seeking to protect its interests. Charities have a lot to gain from services like the ones Perennium offers.
As an example, what have you put in place with the backing of Perennium?
(JPP): The FAPBM has always sought to pursue excellence in anything they do. That means adhering to recognized best practices, but also trying to be at the forefront in every aspect, including on the management of our financial assets. Under the guidance of the Foundation’s Investment Committee and Perennium, we decided to innovate and were among the first, if not the first environmental Foundation in the world, to invest a significant portion of our portfolio in Impact Investing. Today, FAPBM is not only the largest environmental Foundation in Africa (with a capitalisation of over €70 million) but also the one with the fastest growth in twelve years of existence. A quest for excellence that the Foundation leads with Perennium by its side.
Do environment-focused charities always collaborate with a financial advisor?
(JPP): From my experience, I think I can say it is not frequent. Not all Foundations have taken the necessary steps to professionalize the management of their investments, although it seems that this trend is increasing. However, I would say that, as a general rule, when a Foundation is created, investment strategy issues are often underestimated compared to other more immediate topics, such as identifying board members. This may seem like nonsense because the primary reason for an endowed charitable institution is the sound management of its funds.
In your opinion, why aren’t Foundations more focused on investment matters?
(JPP): One must not generalize too much…! Based on my experience at the FAPBM, there was simply a lack of specific expertise of the Board of Directors. We did have very competent people, with even a former Minister of Finance, a banker and an economist on the Board, but investment management is a very technical field, with the added complexity of a financial world in constant evolution. In order to fully grasp it, one must work and have worked in this domain, be a seasoned professional, an expert. During our first years, without Perennium by our side, we were not able to have the right reflexes and certainly did not have a complete understanding of all of our needs.
Arnaud is a very good pedagogue who helps Foundations follow the objectives they have set for themselves. With his knowledge of the field we operate in, he can help us compare our practices with those of other institutions similar to us, and analyse market developments. All this enables us to steer the Foundation in the right direction.