The Silicon Valley multi-millionaire who puts his money where his mouth is

“After so-called ‘liquidity events’ in Silicon Valley, partners often go different ways, if one wants to do the Ferrari thing and the other wants to do the mindfulness thing,” says Kleissner, 63.

Together the couple decided to go a third way – to engage in what is now called ‘impact investing’, but which didn’t have a name when they started doing it in the early 2000s.

Kleissner hastens to clarify he is a multi-millionaire, not a billionaire.

“In Silicon Valley, it is a caste system. Billionaires are not that collaborative because they have so much money they think they can solve things by themselves.”

The Kleissners decided they wanted to use their wealth to make “positive investments aligned with our values,” he says.

Loading

“Back then, our financial advisor didn’t really understand what we were asking.”

Now impact investment – sinking money into companies and ventures that deliver positive social and environmental returns – is a growing movement.

This week Sydney will host an Impact Investment Summit, at which Kleissner will speak remotely from his home in Big Sur, California.

Former foreign minister Julie Bishop will also deliver an address.

“If you are 100 per cent an impact investor, you want to do it across your whole portfolio, in all your asset classes,” Kleissner says.

The Kleissners hold their cash in community development banks, rather than the Bank of America, for example, which “might use your money to invest in dirty coal or the weapons industry, which is incompatible with our values”.

They also invest in renewable energy projects, renewable timber, carbon offsets and social impact bonds – for example, in a UK organisation that seeks to lower recidivism rates in criminals.

Asked about Prime Minister Scott Morrison’s stated desire to outlaw “secondary boycotts” of companies that deal with mining companies, Kleissner notes he is not an expert on Australian politics.

But, he says: “the dirty coal industry is doomed to go under, no matter the regulatory environment”.

Loading

“Private capital expects to be compensated for whatever risks they take, and as the liabilities get bigger, the money will dry up and [fossil fuel companies] will not get financing, even if regulators try to prolong their slow death,” Kleissner says.

Kleissner urges ordinary people on average salaries to engage in impact investment through “ESG” (public companies with good environmental, social and governance practices), or through crowd-funding.

“They can use a relatively small amount of capital to participate in initiatives they care about in their community.”