Q&A: Christina M. Alfonso
What is Madeira Global?
It’s an impact investment and advisory firm. We work with family offices, qualified investors and institutional investors that seek to deploy assets in the area of impact investing.
Define impact investing.
Intentionally seeking social or environmental benefits alongside financial returns.
How does your definition differ from other definitions that investors might encounter?
On the more philanthropic end of the spectrum, the expectations are more focused on what we call “impact first”—making sure that the investors achieve the social and environmental benchmarks they set out to achieve.
On the more traditional side, the expectation is typically “financial first,” meaning that they absolutely want a financial return, and if there happens to be a social or environmental benefit alongside that, then great.
We are more closely aligned with the financial first, though not so much so that we disregard the need to achieve the social.
Can impact investing achieve the same financial returns that traditional investing can?
Impact can be deployed just like any investment in debt or equity, so the structure that you choose will ultimately determine the expectation on the financial-return side. If it’s something like an equity position in a company like Tesla, the expectation would obviously be on the higher end.
What are some other examples of impact investments?
We focus on six areas, including affordable housing, renewable energy, infrastructure development and education. These are the areas where we’re seeing the most opportunities on the commercial side.
Tell me about the services that Madeira provides.
On one side is the Madeira Global Foundation; on the other, Madeira Global is separated into advisory services and capital management.
Why a foundation?
It is really just a vehicle to allocate grant capital to for-profit social businesses.
Where are you seeing the most interest in impact investing?
Typically it‘s a younger investor or philanthropist, and San Francisco is certainly a hub for impact funds. But I wouldn’t disregard New York—it’s a financial hub, and given the financial market performance over the last few years, when volatility has scared people, this is an opportunity to diversify away from traditional investments.
Where do your interests in finance and philanthropy come from?
My father emigrated from Cuba in the early ’60s and ended up studying business—he climbed over the course of his career to a position in finance that he was really happy with. So he’s been a mentor and guide to me.
My mother always emphasized service—she was a nurse and worked in neonatal intensive care. So my life was polarized between wanting to work in business like my father and wanting to help others like my mother.
Many investors conflate impact investing with emerging markets. Was that your experience in Brazil?
Investors do flock to things that have this trend appeal. And the families that we worked with while I lived there were so eager to identify the opportunity and allocate capital to it that they were failing to ask important questions like: How is this structured? How do I get into it? And more importantly, how do I get out of it?
But impact is not specifically for emerging markets. There are opportunities around the U.S.
Madeira is only two years old. What are the biggest challenges for you?
Ultimately I hope that we drop the word “impact.” My hope is that through my work and the work of the impact-investing industry as a whole, we’re able to convince investors that you don’t need to give up the financial return to achieve the social and environmental objectives.
Do you have a five-year plan?
We have a 50-year plan.