Vote for your favorite SOCAPOpen sessions for a chance to see them at SOCAP21

How what Ron Cordes does fits together – the MicroVest deal and two focus areas

SOCAP Global July 27, 2011

Over the last four years, Ron Cordes – successful financial services entrepreneur – has become a ubiquitous presence in high-level and ground-level gatherings in the social capital market. Part of working groups trying to forge meaningful partnerships with the state department, the White House, and to a handful of colleges across the country, he’s also been behind a major new initiative, ImpactAssets. And now his foundation has bought a big chunk of MicroVest, the $150 million investment company based in – but expanding out of – microfinance.
How does it all make sense? What are the guiding principles or focus areas to all that he’s doing? When you peel it back a layer, Cordes – a Good Capital and a Hub Bay Area investor – says he really has focused in on two areas. First, he’s realized that what he’s best at is something the social capital market needs: people building financial institutions with what I call mission insurance built in (some way to prevent mission creep if they either become highly profitable and hold a valuable place in the market, or if they get in trouble).
His first effort, ImpactAssets, which launches officially at SOCAP11, is a non-profit joint venture with the Calvert Foundation to create a pipeline of investing for impact by integrating impact investment fund offerings with the software used by high net worth money managers. Doing that turns the wealth manager gatekeepers into advocates, since they get to count investments in funds like E+Co or Root Capital or Good Capital’s possible next fund as assets under management, which is how they get compensated.
Cordes’ second play in building a related suite of financial services businesses was to buy 18.7% of MicroVest, a microfinance fund in which both he and I have been personal investors. MicroVest is on the ImpactAssets fund platform; so he’s taking an active board role as well as putting his money in one of his first company’s customers.
“What I’m good at is creating financial services businesses,” Cordes says. “I like it and I think we need it. I think we can build MicroVest into a billion dollar company, going far beyond microfinance. I’m excited about it. We need a lot more infrastructure players; you can count the ones who are really doing something, making something happen on maybe three or four hands. I think that’s changing as the market starts to take off.
“I’ve seen an amazing groundswell of interest in in the last few months. I’m excited to be part of delivering a return and solve big problems and help catalyze the space. It’s a commercial investment firm with what I call a strong social ballast, to keep it grounded.”
The mission protection he’s built into both deals is a simple one: all of the ownership of both ImpactAssets and Microvest is held by non-profits. In the case of MicroVest the owners are CARE and the MEDA (the Mennonite Economic Development Associates), and now the Cordes Foundation.
The rest of Cordes’ active philanthropic efforts (he’s still actively engaged with the multibillion dollar financial services company that bought his last for-profit company), is spent building a network of colleges promoting, getting involved with, and studying social enterprise.

Join the SOCAP Newsletter!