Birmingham, Alabama – 20 August 2019 – During their 11-month tenure the 2018-2019 Kirchner Food Fellows investment team looked at over 100 companies working in the area of soil health. Consistent with previous cohorts they conducted preliminary diligence on several and detailed diligence on a few within the program’s constraint of an academic year. Despite the fact that many of those companies were doing admirable work, at the end of the process the Fellows were not convinced that the right combination of risk-adjusted return potential, impact contribution, cultural alignment and mandate fit existed to warrant an investment on behalf of the Kirchner Impact Foundation – a rather salient demonstration of investment discipline in the current era of sometimes less than diligent capital allocation in the impact investment space.
“Our program is about training the next generation of investment professionals that demonstrate discipline, self-confidence and thoughtful deployment of capital through innovative models,” commented Blair Kirchner, Director. “We are proud to congratulate the cohort for showing the resolve to not make an investment for the sake of making an investment and congratulate them on a remarkable and extremely noteworthy tenure as Fellows. We all know it is easier to say ‘yes’ than ‘no’ but these fellows did the right thing – not the easy thing.”
The Fellowship program has achieved notoriety by giving the students full discretion over the investment decision, a program element that requires the students to maintain high levels of self-discipline and professionalism. This non-traditional learning approach; which relies heavily on the drive, values and work ethic of the Fellows; is proving that inexperienced capital allocators can be developed into highly effective stewards of impact capital in a relatively short period of time.
“We have a tremendous amount of respect for the companies we evaluated for investment this year,” commented Hattie Brown, 2018-2019 Kirchner Food Fellow. “The process was incredibly intense, and the burden to invest the Foundation’s funds wisely was heavy, but at the end of the day I am convinced we learned far more about investing than any course could ever teach, and for that, I am eternally grateful to the fellowship and the entire Kirchner organization.”
By developing disciplined impact investors, the program is helping address a known problem in the impact investment space – too many well-intentioned investments are being made without the proper investment rigor. Unfortunately, over the course of these Fellow’s tenure, a significant lack of investment rigor was confirmed on multiple occasions. As Wendy Apt pointed out it in her 2018 article; Almost Everything You Know about Impact Investing Is Wrong, “if it (impact investing) keeps attracting financial resources without demonstrating its effectiveness, it may be responsible for a large-scale misallocation of capital on the basis of well-meaning intentions.” Conversely, if programs like the Kirchner Food Fellowship can encourage the development of values-based, impact capital allocators with the passion of a Peace Corps Volunteer and the clear-eyed realism of a seasoned VC then large scale asset misallocation might be avoided.
“Kirchner Group has a culture based on real value creation and thus we are particularly sensitive to the mistake that anything that glitters must be gold”’ added W.B. (Bud) Kirchner, Founder and CEO of Kirchner Group. “The world will not be improved by investing in good people or good initiatives – they must both be in the same place at the same time.”