Miki Yokoyama, managing director of Aurum Impact, talks about the unique opportunity to drive family offices to invest into impact and what is holding them back.
Miki Yokoyama, managing director of Aurum Impact, a German impact investor, is convinced the opportunity for family offices to invest into impact remains largely untapped. This is something, she says, her firm wants to change by strengthening collaboration across the German investment ecosystem.
Yokoyama met Jan-Hendrik Goldbeck, one of the heirs to the family-run construction company Goldbeck, which he runs with his brother Jörg-Uwe Goldbeck, in 2022 when she was setting up impact venture capital (VC) firm AENU in Berlin.
She says that, at the time, she felt frustrated by the restrictions on VC investing, including the fixed investment period and return pressures. This meant having to invest disproportionately into software businesses simply because “you cannot generate the same scalability investing into hardware”. She says that investing into social impact was also more difficult because of the perception of lower financial returns.
“When I met Jan-Hendrik, we realised we shared a similar mindset and that as a family they could invest much more flexibly, take a longer term view and accept concessionary financial returns if there was a clear social or environmental return,” she says, explaining that he and his two brothers – a third brother Joachim Goldbeck runs the solar business Goldbeck Solar – decided to set up Aurum Impact in 2023, as a complementary business to their existing family office.
The Goldbeck family also already ran a foundation so the motivation for the brothers was that this would allow them to take more responsibility for their wealth by backing solutions-driven entrepreneurial businesses and funds.
“They were keen to put more money into impact investing but they also, specifically, wanted to pioneer investments that were really impact-first rather than only investing for impact if it delivered the same returns as traditional investments.”
Challenges facing family offices
Yokoyama articulates Aurum Impact’s mission as aspiring to encourage “a greater number of families to allocate more capital towards impact topics.”
According to her, one of the problems preventing family office investment into impact at scale is the belief held by banks and wealth management companies in Germany that there is not enough demand.
“We have also found that what they do offer in terms of impact falls short of what a family office would want or need,” she adds, explaining that a common frustration among members of family offices is the lack of “professional and authentic” impact investment advisory firms they can turn to with their investments.
Yokoyama says the next generation of entrepreneurial families are also often in full time jobs unrelated to the financial industry, creating a mismatch between them and the people advising them on their finances.
“These are people working as doctors, teachers and in other professions, and some don’t feel comfortable speaking the language of these bank managers, let alone challenging them. We need to educate both the next generation and the advisors,” she says.
Yokoyama says that Germans are also very private about where they invest, so there is a lack of role models, which compounds the problem.
Strengthening the impact investing ecosystem
Aurum Impact has adopted an ecosystem approach for its own investment strategy as well as to galvanise the wider investment community to invest for impact. Yokoyama describes it as an onion, with each layer dedicated to different stakeholders within the impact investing ecosystem.
“We want to contribute to solving systemic challenges and problems within every layer, whether it’s talent, startups, VCs, LPs or the broader ecosystem.”
For each of these layers, the firm has identified the challenges preventing more capital from flowing into impact and ways in which this can be addressed.
“This includes what we can do as a tiny player in collaboration with others to move the entire ecosystem in that direction,” she says giving the example of limited partners, such as pension funds or corporates.
“We are working with LPs to understand what would help them invest into the asset class. Is it standardisation? Is it more transparency? And to figure out what role we can play in enabling that,” she says.
The company is also in dialogue with the next generation of entrepreneurial families to get a measure of their appetite for impact investing and to evaluate collaboration potential to build out Germany’s impact investing ecosystem.
“We have spoken to numerous members of Germany’s entrepreneurial families about shifting more capital towards impact investing and we see clearly they want to do things differently to their parents or grandparents. Together, we are working to overcome the hurdles and seeing what we, as a group, could do to inspire more families to get into impact investing.”
Investments
To date, Aurum Impact, whose team is based in Munich and Berlin, has nine portfolio companies, and recently signed a 13th fund investment, with initial ticket sizes ranging from €500,000 to €2m for companies and €1m to €10m for funds. Whilst the company’s investments into impact funds can be global and are sector agnostic, its startup investments are mainly focused in Europe targeting issues related to building stable and equitable societies, supporting terrestrial and ocean ecosystems, climate and energy, and materials and circularity.
In the area of social impact in particular, the firm sees a widening investment gap as well as an opportunity.
“We are not seeing enough social startups, particularly on issues such as elderly care but also democracy or the digitisation of education,” she says, explaining that the firm is supporting and partnering with the Social Impact Republic, a support hub and network for social impact startups working across a range of issues, including healthcare, the climate crisis, educational equity, and inclusion.
The team is also purposefully targeting hardware capex-heavy businesses delivering solutions to social and environmental challenges, which Yokoyama says have received less interest from impact VCs.
“In the last 10 years, the impact sector has supported a lot of startups delivering digital solutions to social and environmental challenges. But if we want to decarbonise cement or sequester carbon, we also need to invest into the hardware and the companies inventing and developing physical solutions.”
This includes companies such as Paebble, a Nordic-Dutch company, which has developed a rock powder that stores carbon captured from the atmosphere for use in building materials such as concrete. The material is able to substitute concrete’s clinker content, its biggest CO2 emitter, with claims of its potential to reduce concrete’s carbon footprint by up to 70%.
“Goldbeck has tested the material and seen that it works. If we’re able to use it in our own construction projects, we think that could reduce the emissions of our cement by 30% to 40%,” says Yokoyama.
Looking ahead, and against a backdrop of increasing geopolitical uncertainty, Yokoyama firmly believes there will be an increase in capital flows towards impact investing from family offices within the next five years.
“Although governments continue to have an important role to play in responding to climate change and social challenges, there is also a vast amount of private money that will move towards tackling these issues too,” she adds.
