- Carlyle group invests in companies that create sustainable economic value
- The Carlyle Group is one of the world’s largest & most successful investment firms with $212 billion in total assets
- Megan was the former VP of Goldman Sachs investment management division and helped build the ESG and impact investing business
Matt Bird – Host, Traders Network Show: 00:00
Welcome back to the Traders Network Show broadcasting worldwide from Greenwich, Connecticut. I’m Matt Bird. We’re here at the 2019 Greenwich Economic Forum. And my next guest is Meg Starr. She is the principal and head of impact for the Carlyle Group. Meg, welcome to the show. Oh it’s my pleasure. So you’re coming hot off a panel right now and we’ve got a bunch of thought leaders here. Can you give me a little bit of a takeaway or give our audience a little bit of a takeaway, what you talked about up there and what’s going on?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 00:27
Yeah, so the panel is really interesting. We were talking about where ESG investing has been and where it’s going and I think it’s a field that gets a bad rap because people hear ESG and SRI and CSR and it can mean a lot of things and it can mean nothing. And I think the point of the panel was trying to tease apart how do you separate out more value based investing from where ESG integration actually adds material value to an investment portfolio. And I think that’s the state of the art for where we are today.
Matt Bird – Host, Traders Network Show: 00:52
Well that’s a very sophisticated looking at the economic climate of those investments. But the, do you believe that the, the CSR aspect is really dressing the long-term consumer application of those investment?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 01:04
Yeah, so at the Carlyle group, we’re a private investment firm and we’re in the business of buying good companies and making them great companies. And as we think about the next few decades, great companies create sustainable economic value. And I think we have potentially some misconceptions about the word sustainable in the US you hear that and you think people wearing Birkenstocks and dancing around a campfire and sustainability means literally the ability to persist over time. And that’s what we’re looking for.
Matt Bird – Host, Traders Network Show: 01:29
Be our eyes and ears for a minute. You’ve been in the room for catching a lot of the content in the panels. What are some of the big takeaways for you so far?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 01:38
I think the big takeaways are, it does feel like we’re at a pivotal point for capitalism. And you’ve seen that with the business round table statement, which was issued a few weeks ago, 180 different CEOs sign on to that including the Carlisle group, CEO Q Song Li. It’s affirming the fact that you know, companies work for all of their stakeholders. And so how do you think about the various stakeholders as core to generating economic value? And I think that’s really starting to pervade the conversation here and in fact that really is a topic of Davos in the next year. And so I think we’ve seen that as a pretty interesting trend for something that used to be almost a niche corner of the investment market is really coming into the mainstream
Matt Bird – Host, Traders Network Show: 02:14
Now Davos is something I have a lot of experience on. We covered the last five years and the theme, you know, walking into that much like today is about public private partnerships. How are public fiber parsers playing in economic development?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 02:25
Yeah, I think one of the interesting things I’ve seen over my career is the idea of, you know, public sector and particularly NGOs and you know, nonprofit organizations have incredible data and incredible resources because that’s what they built their careers and their organizations around. The challenge is how do you translate that into investment application? And so I think one thing that’s really interesting is to think about how do you play that middle role? And so, you know, a lot of investors are concerned about climate change. How do you know what that means to a given company with its, you know, large supply chain and the different property plant equipment that it has. There’s some really interesting NGO is, and I’ve done incredible work mapping, sea level rise mapping, you know, increase weather related incidents. And so I think particularly in the world of ESG and impact investing, how do we get incredible data and work that’s been done from the public sector in the NGO sector and make it relevant.
Matt Bird – Host, Traders Network Show: 03:15
You know, it’s an interesting thing when you look at the commodities and futures and those sorts of things and you start looking at climate change. Does Carlyle group look at it within a 10 year 20 or 30 or infinite timeline? I mean, how do you look at your investment strategy on that side?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 03:30
I mean, kind of all of the above. A big part of it is what asset class are you focused on and what is your hold period? There are some risks that will be really material in the next potentially 12 months. You think about the weather related events we’ve had, you have to be really aware of where all of the different properties are for a given company because if there’s a disaster, we need to know how to respond. We need to know how to get back to business as usual. At the same time as we think about, you know, energy investing, the energy transition is happening, but it’s going to happen over the next 20, 30, 40 years. And so how do you prepare for the future while still making prudent decisions today?
Matt Bird – Host, Traders Network Show: 04:08
Wow I love that too. Listen, transitioning into the forum specifically we had a governor, we had the mayor we had obviously your CEO, we had a bunch of other thought leaders here. How important is this to Connecticut building this Piper partnership thought leadership type of environment, bringing all of this leadership to one area?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 04:28
Yeah, I think it’s incredibly important. And I think what I liked the most about this event is that I go to a lot of ESG and impact events that can sometimes seem like an echo chamber where it’s people that are already true believers talking to each other. And I think the wonderful thing about the Greenwich economic forum is that you have the best thinkers from across all of these different industries and they’re being exposed to topics that might not be part of their day job, but that people are interested in learning about and are really digging into here. And so I much prefer to speak with investors here about material ESG topics because that can probably move the needle more than talking to people who didn’t fold.
Matt Bird – Host, Traders Network Show: 05:02
You know, it’s interesting and you’re dealing with a very comfortable demographic of like minded are here and they’re all the decision makers that need to make decisions on those, those topics on sustainability.
Megan Starr – Head of Principal & Impact, The Carlyle Group: 05:13
Yeah. And you saw that, you know, some of the bigger names from earlier today. Paul Tudor Jones, he founded Just Capital, which is a nonprofit entirely dedicated to getting better data on just corporate behavior. David Rubenstein, who’s one of the founders of the Carlyle group where I work, he is focused on how do you think about where the world is going and how do we invest so that all stakeholders benefit. And so I think the other interesting thing is hearing from the very top why this is mission critical and that differs across asset classes and industries and strategies. But this idea of where the world is going is, I mean it’s really top of mind.
Matt Bird – Host, Traders Network Show: 05:46
You know, I know you’re really busy and we had to cut to commercial break and just a few minutes any key takeaways you’d like the audience to know that you picked up here and what’s next?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 05:54
Yeah, so I think one of the things that came out of our panelize, the idea that ESG investing is just investing and so how do you apply the same level of rigor and discipline that you take to any other investing question? It’s another lens of looking for material risks and return opportunities in a changing world. And so you know, ESG investing and increasingly impact investing, which is focused on growth markets and driving measurable social environmental impacts. You know, it’s possible to be well, you just have to take the same level of rigor to it.
Matt Bird – Host, Traders Network Show: 06:23
And so what, what we expect from Carlyle group in the next five years?
Megan Starr – Head of Principal & Impact, The Carlyle Group: 06:30
You have to stay tuned.
Matt Bird – Host, Traders Network Show: 06:33
Oh, I love that. Meg Starr everybody with the Carlyle group, she’s a head principal and head of impact. We will be right back after these messages. Special thanks to our affiliate partners, ABC, NBC, Fox and CBS. Don’t go away. You’re not going to want to miss this.