By Leslie P. Norton
July 1st, 2019
Kristin Hull is having an excellent year. The CEO of Nia Impact Capital has just completed another 12 months of market-beating performance for her gender-lens portfolio, and if things go according to plan, a mutual fund version could be available soon.
Gender-lens investing—incorporating gender analysis to get better outcomes—is a swiftly growing corner of the environmental, social, and governance–oriented investing universe, and recently, Hull is one of its best practitioners. During the first quarter, the Nia account returned 17.3%, beating the S&P 500 index’s 13.7% and the MSCI ACWI’s 12.4%. Over three years, it returned 14%, compared with 13.5% for the S&P 500 and 11.2% for the ACWI.
That’s no small feat, considering that it’s an all-cap global growth stock account that carries a healthy slug of foreign equities, which have underperformed U.S. shares. The minimum investment is $100,000; the account has $70 million in assets.
A strong pedigree
Helming it is Hull, 51, a charismatic, lively, former grade-school teacher who was raised by a legendary stock market trader famous for calling the bottom of the 1987 Black Monday market crash.
“My goal has been to democratize this movement, so people can access it through their 401(k)s and have access to the solutions, growth, and potential earnings,” she says. To that end, she is also considering introducing an SEC-registered version of the account—essentially, a mutual fund—this year that would be available to a broader range of investors.
One current investor is Kat Taylor, the billionaire philanthropist who launched Beneficial State Bank with her husband, Tom Steyer, founder of Farallon Capital Management. Says Taylor: “Kristin is incredibly curious and has the intellectual horsepower, [qualities that] are all great for an investor. She also has a huge heart and a moral compass that is absolutely steadfast. It’s the combination that makes her not only good, but great at what she’s doing.”
A quick look through Hull’s eclectic, concentrated portfolio offers a glimpse as to why the portfolio is doing so well, despite its 27% weighting in foreign stocks.
At No. 1, wind and solar generator Pattern Energy (ticker: PEGI) is up 26% over the past 12 months, as the San Francisco–based renewable-energy company moved into profitability—and investors snapped up its nearly 8% yield.
No. 2 is Vestas Wind Systems (VWS.Denmark), the Danish powerhouse that produces advanced wind turbines for electricity generation. Its stock has jumped 44% over the past year.
“It’s not only the right thing to do: It’s simply smart investing. In this case, cause and profits can go hand in hand. ”
—Kristin Hull, CEO of Nia Impact Capital
Another top position is furniture maker Herman Miller (MLHR), whose shares have returned 8.2% in the past year amid tariff and economic concerns, as it has beaten analysts’ forecasts.
Hull starts her search for investments by looking at companies that improve the lives of women and girls, as defined by some of the United Nations’ Sustainable Development Goals.
Because Nia Impact Capital runs an impact account, it also measures the effects of its holdings according to indicators listed by the U.N. goals. Specifically, it looks at five of those 17 indicators: companies promoting a sustainable planet; health care; sustainable agriculture; education; and affordable housing. All holdings must have women in positions of leadership.
Herman Miller’s CEO, Andi Owen, is a woman. Vestas has a female chief financial officer and two female directors. Two of Pattern’s seven directors are women.
Vestas and Pattern promote a sustainable planet, with zero net water use and zero net waste. So does Herman Miller, which gets 100% of its electrical energy from renewable resources and is now aiming for zero waste. The company is also designing environmentally friendly furniture.
“It’s unusual for any gender-lens fund to be specific about impact, says Paul Herman, CEO of HIP Investor, a sustainability research and data provider. “Other funds are focused on women in leadership, but don’t get as serious about products and services and solutions.”
Much of the financial analysis is done by co-managers Garvin Jabusch and Jeremy Deems of Green Alpha Advisors, a Colorado-based investment manager with long expertise in sustainable strategies.
Nia’s holdings range across all caps and markets: “We’re bursting out of the style boxes,” says Hull. They look for companies operating in areas of current or expected high demand, with strong earnings growth and innovative management. The market has high expectations for many of her holdings: The fund’s average forward price/earnings ratio is 25 times, versus 16.5 for the S&P 500.
Hull and her team are true stockpickers: The account owns shares of 40 to 50 companies, and has a low turnover rate of 25%, which means it’s not a big trader. And the portfolio has an exceptionally high active share of 94.5 (compared with the S&P 500), which means it looks nothing like the index. Because it invests with an eye toward the U.N. sustainable development goals, it’s easy to report impact. The portfolio excludes weapons manufacturers and fossil-fuel companies.
If 10,000 hours makes an expert, then Hull got an investing degree as a child in Oakland, where her father, Blair Hull, created trading algorithms for a living and routinely talked about buying low and selling high to his four children around the dinner table. On Black Monday of 1987, trading lore paints him as the guy who reversed the market’s decline by buying at the bottom.
His daughter eschewed finance to teach fourth graders in the Oakland school district, while getting a doctorate in education at the University of California, Berkeley.
Then, in 1999, her father sold his firm to Goldman Sachs (GS) for $531 million. Kristin Hull owned 5% of the company. Suddenly, the fourth-grade teacher was rich. As the eldest child, Hull was put in charge of the family foundation.
Still, Hull relates, “I was happy to have my head in the sand.” Then came 2007, when she attended a session at a philanthropy conference, in which the panelists were trying to persuade foundations to invest 2% of their endowment in the areas in which they made grants.
“ “To ignore that the endowment is having an impact is irresponsible.” ”
A light bulb went on for Hull. “I realized it needed to be 100%,” she recalls. “I was thinking it was the grants that made the difference. To ignore that the endowment is having an impact is irresponsible.”
The family foundation held Goldman shares, and could sell chunks according to a schedule. Within six months, Hull had deposited the foundation’s funds in seven community banks. She also put money into loans to underserved women: “I was in charge, and there was no one stopping me.”
In 2008, when stocks plummeted, the endowment was up 2%. Other foundations began asking how she did it.
She began doing angel investing with entrepreneurs with social missions. That wasn’t enough: She started her own investment advisory shop and named it Nia, which is Swahili for intention and purpose. “It’s not only the right thing to do: It’s simply smart investing. In this case, cause and profits can go hand in hand,” Hull says. “It really seemed true to me that people weren’t going to move their money in alignment with their values until they could do this type of investing in the public markets.”
After selling his firm to Goldman, Blair Hull ran for the U.S. Senate in the Illinois primary, and lost to Barack Obama. Then, he started his own investment-management firm, Hull Tactical Funds, with a market-timing exchange-traded fund. “I have to tell you my performance has failed in comparison to my daughter’s,” he says.
Fortunately, however, he is also an investor in her fund. “It only makes sense that if you had all old white males on the board and your customers are a diverse group of people, you’re not going to make decisions that are wise. I actually think this has some legs,” he comments.
Kristin, meanwhile, tries to convince him that modern portfolio theory is wrong, beginning with its implicit premise that the planet has infinite resources that can sustain infinite returns. “Nia is my offering and is part of my theory of change,” she says, “that allows investors to step away from indexes to know what they own, to own what they own, and to be proud and excited about their portfolio.”
So far, she’s making a solid case for her approach.
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