Sali’s seeking maximum impact

The entrepreneur who made $250m from the sale of Swisse Vitamins is moving into the burgeoning impact investment sector.

Radek Sali wants to have a social and financial impact.

The young entrepreneur who made $250 million from the sale of his Swisse Vitamins business for $1.67 billion is moving into the burgeoning impact investment sector for the first time, establishing a $30m fund that he hopes will be worth $250m within five years.

Three years ago Radek Sali established a principle-driven family office known as Light Warrior that is run by Adam Gregory, formerly the co-head of Goldman Sachs’ Australian consumer retail and healthcare investment banking business.

The family office was established after Goldman Sachs helped sell Mr Sali’s Swisse Vitamins business to Hong Kong-­listed Biostime International Holdings in October 2015. Now Mr Sali is establishing an impact investment fund as part of the Light Warrior Group that will tap into the global impact investment market, estimated to be worth $US500bn ($714.3bn) and growing.

Impact or so-called shared value investing provides investors with financial as well as social returns.

“We founded Light Warrior Group after we sold Swisse because we wanted to make investments that contributed positively to society and the environment,’’ Mr Sali told The Australian.

“We wanted our investment capital to be about more than just making money — that’s the future of investing and building great businesses — using capitalism for good.”

Mr Gregory said Light Warrior focused on having a social or environmental benefit through many of its investments but was not prepared to accept concessionary financial returns.

“Our impact-investing strategy is to be an alternative to traditional investment manage­ment, not an alternative to philanthropy — that’s an important distinction as we are in the business of doing good for the world but still deliver strong shareholder returns,” he said.

The Impact Fund, as it is known, is planning to invest initially in renewables, specialist disability accommodation and social/affordable housing.

Earlier this year it successfully supported a $5m social impact bond from the NSW government backing a program helping young unemployed people find and stick to jobs.

This and some other social impact investments previously made by Light Warrior have been sold into The Impact Fund, allowing it to target a financial return of 7-11 per cent and pay a running distribution yield of more than 6 per cent a year (after fees).

“We have taken the social impact bond we did in NSW and some other assets we had before and vended them into the portfolio. So we have these assets that have matured on the balance sheet, which allows us to pay the yield,’’ Mr Gregory said.

“The best way to tackle some of the big problems is to get large pools of capital to fix these problems and invest them in assets that deliver market rates of return.

“From here it is just like other funds management businesses. We would like to think there is a huge opportunity to grow this fund. Down the track we would like to think we can attract some super fund money and would like the fund to be worth $250m in five years’ time.”

Matthew Tominc is the fund’s chief investment officer and Alex Debney is its investment director. “We want to be at the forefront of this new wave of conscious capitalism, and provide like-minded investors with access to our experience in impact investing,” Mr Tominc said.

Mr Sali and wife Helen have also founded the Lightfolk Foundation, the philanthropic arm of Light Warrior, which has founded several wellness retreats.

Light Warrior’s separate venture capital arm now has 10 investments including a firm known as “Made by Cow”, which claims to produce the world’s first safe-to-drink raw milk. It is a joint venture with the Kirin-backed Lion Group and the Harris family that owns the Harris Farms Grocery business.

Light Warrior also owns a stake in the boutique active bond fund JCB, chaired by former Future Fund chief executive Mark Burgess.

Light Warrior’s other investments include low-sugar clinical hydration company Hydralyte; OurCrowd, a platform that brings crowd-funding to the tech sector; and a joint venture with Wanderlust USA to bring mindful living festivals to Australia, New Zealand and Southeast Asia.

Light Warrior also owns a one-third stake in the Jimmy Grants casual eatery chain owned by MasterChef judge ­George Calombaris and has a portfolio of currency, bonds and hedge funds.