“If you miss out on big systemic changes, this can be punitive in terms of returns – if you picked the best tobacco company in the ’70’s, it didn’t matter, you would always have been trumped by any tech company. It’s going to be a prerequisite for success in the future to have a purposeful approach to investing. The secular shift toward thoughtful, purposeful, responsible investment trends grounded in climate is so powerful, that if you’re not in the boat, you’re drowning. ”
— Basil Demeroutis
Basil Demeroutis (@Basil_FORE) is the Managing Partner of FORE Partnership, a purpose-driven real estate investment firm active in the UK and Western Europe. Basil founded FORE Partnership believing in a low carbon future in which property can be a force for social good and his mission has been to prove that driving environmental sustainability and positive social outcomes is good for investors’ financial returns. Basil is passionate about sustainable property and has aligned FORE Partnership’s investment strategy with his, and the company’s investors’ core values.
Born in Toronto, Basil studied Aerospace Engineering at Cornell University thinking that he would work for NASA or at the Jet Propulsion Lab building rovers and spacecraft. In the end, after he graduated, he changed his mind and began his career in finance at the Bankers Trust analyst training program in the United States, after feeling that engineering was too slow moving for him in terms of making an impact. After five years there, he moved to Bear Stearns and eventually moved to London.
After spending a total of eleven years in asset finance, where he was financing everything from ships and aircraft to satellites and real estate, Basil made the move from advising people on real estate investing, to actually becoming an investor in real estate and joined Jargonnant Partners in Germany, as Managing Partner. In 2008, he became a Partner at Capricorn Investment Group, the family office of Jeff Skoll, before founding FORE Partnership in 2012.
In this episode, we discuss the integration of social and environmental impact in the built environment, how Basil puts the “E” and the “S” into their real estate projects. We hear about some of FORE’s projects and examples of the real social impact they have made, and we get a true definition of social impact and what it really means. We discuss how social impact can be measured in the real estate arena and the future of biodiversity within real estate investment. Basil also discusses why he decided to forgo a typical private equity structure that pits GPs against LPs when he set up FORE’s unique ‘club’ structure, how FORE became one of the first real estate investors to become a certified B Corporation, and a whole lot more.
I hope you find this episode as deeply insightful and valuable as I did. Please enjoy!
Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. You can watch the interview on YouTube here.
What was your favorite quote or lesson from this episode? Please let me know in the comments.
SCROLL BELOW FOR LINKS AND SHOW NOTES…
SELECTED LINKS FROM THIS EPISODE:
- Connect with Basil Demeroutis: Twitter | LinkedIn
- FORE Partnership
- Bankers Trust
- Bear Sterns
- Jargonnant Partners
- Pictet
- Banque Syz
- Capricorn
- The Skoll Foundation
- Tesla
- B Corps certification
- Cadworks™
- Soul Riders
- Windmill Green
- Social Value Portal
- The TOMs framework
- NABERS
SHOW NOTES:
[00:00] Episode introduction
[03:06] How Basil made the jump into finance after studying Aerospace Engineering
[04:00] Basil recounts his move into real estate investment in Germany, with Jargonnant Partners
[05:50] How Basil came to join Capricorn Partners and set up their London outpost
[07:28] We hear how Basil came to found the FORE Partnership
[09:56] The FORE acronym and what it stands for
[10:50] Basil describes why he became to involved in Sustainable Investment
[12:52] An overview of the FORE Partnership and their mission – the E and the S of ESG
[17:28] The company’s B Corporation certification and what this means
[19:35] We hear about the benchmarks used in FORE’s investments
[20:24] Basil describes social and environmental impact in terms of the built environment
[25:00] We hear about FORE’s mission with regards to the social aspect of their buildings
[26:12] Basil describes the Cadworks™ project in terms of the positive social impact it delivers
[29:30] The ‘Building Forward’ strategy and FORE’s vision for the future
[36:30] A real-life example of a FORE Partnership investment and how it performed
[41:50] The role of concrete and steel vs. new building materials in the future
[44:30] Basil describes the innovation in technology around new building materials
[47:30] Basil’s definition of Social Impact
[51:30] How FORE’s impact is measured and the lack of a standardized measurement of social impact
[56:07] Basil’s views on the future of biodiversity within real estate investment
[57:57] The single, most important challenge right now in the sustainable real asset space
[58:22] What Basil knows now about impact investing that he wishes he knew when he founded FORE Partnership
[58:52] Lessons learned from an investment that didn’t work out as planned
[01:00:44] Lessons learned from an investment that worked out better than planned
[01:02:26] Advice for anyone looking to get into the impact investing space
MORE BASIL DEMEROUTIS QUOTES FROM THE INTERVIEW:
“The E and the S [of ESG] are deeply interconnected and so we recognize that buildings are a potential delivery vector for social change. ”
— Basil Demeroutis
“Real Estate is probably one of the greatest untapped opportunities that exists.”
— Basil Demeroutis
“We look at our buildings as a way to deliver social outcomes as much as environmental outcomes. ”
— Basil Demeroutis
“If concrete was a country, it would be the third worst emitter behind China and the US. If steel was a country, it would be number four. ”
— Basil Demeroutis
“We’ve been building buildings the same way as we do today for the best part of a hundred years. There’s been almost no innovation in building construction since we built the first skyscrapers in New York”
— Basil Demeroutis
“[Within real estate] most investors don’t have the language of social impact, or the understanding of social impact…they think social impact is having a gofundme page to raise £10,000 for a charity that they’ve picked out of a hat. That’s not social impact. ”
— Basil Demeroutis
“We‘ve not really gotten to the point, I think, where we can authentically measure social value, and we’ve jumped so far ahead into the conclusion, I worry that we’re claiming victory when we haven’t even fought the battle. ”
— Basil Demeroutis
