We all wish investing were as easy as throwing some money at an agency and they then turn around that investment quickly for a sizeable profit. Investing can be the most volatile business to be in, not just for investors though, but even more so for buyout firms and banks that are investing in assets to accumulate profits.
The market is changing. Not because of a financial crisis or market collapse, but from free-willed social changes that change the way people work, interact, and judge business as a whole. What does this mean for investing? It means that companies that are founded on good, logical values that support a higher standard of living and sustainable practices and profits are becoming an investors dream because the people are behind the companies.
Doing better, doing better things, especially for the community, is proving to be the ace in the hole for private equity firms across the globe. The common good is still there, and people are now fighting for it more than ever, and big businesses and the investment markets are taking notice.
Vinod Gupta, the current manager at Everest Group, had a vision when he was very young. He obviously wanted to be successful, but to also help his community and his family be successful as well. Investing is not about throwing the most money out there to the most profitable companies. It is about looking at the long term impacts your money is making. Vinod Gupta knew this, he studied and worked very hard for a lot of years, and the fruit of his labor = a single $100 investment that turned into a $680M company and a whole lot of people who now have educational, business, and financial opportunities because of his investments and arduous work.
Why Invest in Companies for the Common Good?
Again, more and more people are paying attention to where their food comes from, how the animals are raised before they are butchered, what companies are putting in their products that may be harmful to people, their environmental concerns and habits, how the employees are treated, how they help the community, and a range of other factors that are so profound, that they can sink that ship you’re trying to steer towards success.
Companies that are found to have practiced shady business or are working towards getting rich instead of being a part of the community and helping are increasingly being shunned. As time goes on, the companies that do the most for everyone are going to be the biggest and most profitable companies in the world. Investors have been noticing this.
Companies Changing the Entire Investment Market
Blackstone Group LP – This company has a team dedicated to providing their portfolio companies with the ability to save energy wherever they can. The team is led by a sustainability officer that works with huge companies like Hilton Worldwide Withholdings Inc. to educate them on the impact of energy usage, saving money, and leaving less of a carbon footprint simply by controlling room temperatures, turning off lights, and reducing water usage with modern plumbing and green products. Blackstone has reported of saving over 15% of energy costs within their entire portfolio. If you could not guess, that is a ton of money.
Environmental Defense Fund – This nonprofit is working day and night with portfolio companies to reduce their impact on the environment. Their focus is on operational changes like paper usage, waste, and energy usage.
Cinven Ltd. – This company has a system it has implemented that requires the businesses the parent company controls to create reports every quarter about the employee status’ like work-related injuries or illnesses, diversity, inclusion, and time off. They do this to ensure that every employee that is directly or indirectly employed by Cinven Ltd. Is being treated with respect, dignity, and being paid a fair wage.
The above is just a few of the companies that are adapting to the evolving business market that works for everyone, not just a handful of people at the very top.
Private equity funds are a seriously complicated entity that usually requires a bachelor’s degree to understand. But, to make things simple, these buyout companies and private equity firms are always looking for the long-term investment. Public companies are the ones you hear about in the news all the time, with headlines like “CEO gives himself a $15M bonus while laying off 2,000 employees”. Yeah. Those guys. Those companies are the ones who scramble to find any way, no matter who it hurts, to provide profits every quarter. For long term investors, the short-term problems do not occur, so the long-term solutions that help rather than hurt are finding more solid ground.
In a 10-year fund cycle, the money saved from having employees switch off lights, seeing a return on the investment on energy usage from buying modernized appliances throughout your hotel chain, or seeing that the government wants to give your company a tax break because you decided to go green with your waste is much easier to see as opposed to a public company that reports every quarter. The future is where investors are looking. The future is not now, it is not 3 months from now, not in business terms. Nothing happens in 3 months in business. The future is still far away, but this idea is circulating wildly because the future looks bright, more innovative, and impactful, especially when you want your company to keep their doors open for future generations.
How Vinod Gupta Champions Rags to Riches and Smart Investing
Vinod Gupta is a very successful businessman who was born on America’s Independence Day in 1946 near New Delhi, India. He grew up in a tiny village that did not have modern amenities like running water, electricity, TV, modern infrastructure, or transportation. Mr. Gupta got through high school in general education within his village, but he then ventured out with the help of his family, and he went to college and received a B.Tech. degree from I.I.T., Kharagpur, India.
The story becomes a tale of the American Dream when Mr. Gupta received a graduate assistantship along with his admission to the University of Nebraska at Lincoln. He then went on to receive an engineering degree, and a Master’s in business administration.
Soon after he discovered a niche that had no competition, he founded American Business Lists, which created lists compiled from databases and the yellow pages all around the United States. This was well before the internet in 1972.
Vinod Gupta invested every cent back into his own business. He adapted with the changing times, added industries to his list services, and was completely engaged with the community in which he operated. In 2002, Vinod Gupta’s company InfoUSA, formerly American Business Information, made $302 million in sales, all from a $100 investment all the way back in 1972. The company was sold several years later for $680 million.
The key facts and ideas to take away from Mr. Gupta’s life is that he invested in a company that was doing a good thing for businesses. During his life, he has invested millions into his home village in India, and at the University of Nebraska. He invested back into education. Vinod Gupta is a genuine person with a good heart that worked hard and invested into himself, his business, and the people that worked with him to grow his business.