Collaboration Capital is a national wealth advisory practice focusing on investments that create positive change in today’s economy. The firm encourages for-profit companies to invest in solutions to local concerns traditionally left to the public sector or non-profits, to implement more efficient, economically sustainable solutions.
COO Gary Fitzgerald knows, first-hand, why local problem-solving investments matter. He lived on Long Island during Hurricane Sandy, and Collaboration Capital is based in Houston, Texas, which was hit by Hurricane Harvey.
“I saw countless Houstonians grab their boats and rush to help their neighbors,” he recalls. “Seeing a massive city activate to help in the disaster, and then come together to rebuild, was amazing.”
Houston is a fitting headquarters for a firm that invests in long-term solutions, in an economy plagued by short-term thinking. In less than two generations, the area evolved from cattle ranching to a petrochemical hub. Cement stretches for miles from the city center and refineries dot the beaches of nearby Corpus Christi.
CEO Chris Knapp founded Collaboration Capital in 2017. Knapp had already begun evolving a new kind of wealth management years earlier within Chilton Capital Management, a firm he cofounded in 1996. He wanted to solve big problems through capital markets, and his strategy fused traditional investment criteria with what he foresaw future investments would certainly include: Environmental, Social, and Governance (ESG) criteria.
Knapp saw that, while local bankers used to know their community’s businesses and other borrowers as people, the transition to much bigger banks erased that personal level and diminished investments in the community.
“The lenders’ focus became less on solving problems and more on quarterly profit,” Fitzgerald says. “Collaboration Capital was founded to offer a new investment style that was still entrepreneurial but better for the local economy, community, family, and environment.”
Knapp created ESG strategies that were collaborations among specialists in a wide range of fields including water, gender equality, technology, environment, and governance. Says Fitzgerald, “These specialists get together monthly to contribute the names of the best firms in various industries to our portfolio manager, who then uses this advice to build clients’ investment portfolios.”
“It’s a collaborative model, a meeting of the minds of niche specialists in their industries,” Fitzgerald says. “With their help, we build an optimized, high-quality portfolio that can compete with any traditional one, but it leans in the right direction for social good.”
Many large banks have begun to report their social and environmental impact and compete for LEED ratings on their buildings, but overall, the ESG movement is still new.
“Chris Knapp mentioned ESG to me in 2015,” Fitzgerald recalls. “I had been at Goldman Sachs for 11 years but that’s the first time I heard it.” The team launched their idea that spring and spun it into their own firm a year and a half later.
Fitzgerald believes that, using today’s access to data about impact, business has enormous power to create positive change.
“It’s the business community that is driving change now,” Fitzgerald asserts. “Corporations carry weight, so when they make moves, it matters.”
Fitzgerald believes that movements like the ASBC-backed We Are Still In (the Paris Climate Agreement) will keep the country on a sustainable track despite changed government priorities, but that business leaders must stay actively engaged in public policy discussions.
“We jumped on board right away when we heard what ASBC was doing,” Fitzgerald says. “Access to public policy is a really valuable megaphone to broadcast what we are hearing from our clients and businesses we invest in – that sustainability is important.”
Against the backdrop of a community with plenty of rebuilding to do, Collaboration Capital will continue to demonstrate that short-term thinking is no match for the long-term value of investment in sustainable solutions.