In the sixth installment of the Alternatives Watch 2022 Outlook series, we catch up with advisory firm Uplifting Capital, which caters to private wealth firms and their clients interested in impact investing.
Toussaint Bailey founded the firm last year as a tech-forward private market impact investment platform. He had been the founding CEO of private wealth firm Enso Wealth Management, which he helped grow to nearly $2 billion in AUM. Toussaint also advises several companies and non-profit organizations.
In our discussion, we get a look at some of the broader trends Bailey is following as an impact investor interested strictly in private market strategies with long-term disruptive potential.
Over the next 12 months, how are you formulating your portfolio allocations? What is top of mind?
As a sustainability and impact focused fund of funds, we are driven to find companies and investment strategies that are harnessing disruptive innovation to create impact. We most often feel compelled by innovations powered by technology solutions. Some of the themes that we believe will be pervasive in the next year include personalized healthcare, financial inclusion, education without borders, renewable energy cost parity, and sustainable food systems.
As we approach the 3rd year of the pandemic, what are your thoughts about the macroeconomic picture?
We are very hopeful that this is the year that the pandemic becomes an endemic. Fiscal and monetary policy has been extraordinarily accommodative since the pandemic broke out. We think both will continue to be relatively supportive, as election years tend to be driven by policies that target growth.
As the world continues to recover from the shock waves of the pandemic, supply chains will regenerate and prices should become more stable. The Federal Reserve is very mindful of elevated inflation and is walking a tightrope in their effort to usher the economy to a sustainable post-pandemic future.
Valuations are at or near historical highs in many asset classes. In many cases, these valuations are warranted for high growth private companies that are oriented to solve big challenges and have massive total addressable markets for their products and services. Even if the broader economy remains shaky for an extended period, we expect well-positioned companies to continue on their growth trajectory driven by specific market needs.
What role do you see private capital playing in your portfolio going forward?
We invest exclusively in private capital and will continue to do so going forward, through our multi-strategy private capital portfolios which power our two investment funds and through personalized allocations via special purpose vehicles.
In private equity, we are investing for excess return over public equity markets, alternative income and inflation protection. With our private debt investments, we are investing for enhanced return over public fixed-income markets with alternative income generation and intentional impact from companies and assets that are not found in the public markets.
As impact investors, we embrace targeted investments in private for-profit companies as a powerful tool to pursue solutions to the world’s greatest challenges.