Peter Kellner: a head for finance, a heart for changing the world
Fund manager and philanthropist Peter Kellner headlines the Dec. 1 meeting of the Denver Chapter of the Association for Corporate Growth. In an interview, he talks about what drives him, how to find entrepreneurs in unexpected places and which state has the best skiing.
Kellner is co-founder and Managing Director of Uhuru Capital Management, a fund of funds that provides a significant allocation of its profits to social enterprises engaged in sustainable economic development. He is also Chairman and Founder of Richmond Management, a firm with venture capital investments in technology and communications in the U.S., China and India. Richmond has interests in hedge funds and private equity firms globally, and has provided seed funds to leading investment firms in the US, China, Hungary and India.
As a social entrepreneur, Kellner co-founded Endeavor, a pioneering organization promoting entrepreneurship in emerging markets. He is on the board of Obopay, Inc. and Voxiva, Inc. and is a member of the Board of Trustees of The Allen-Stevenson School, a boy's school in New York City, as well as the Board of Ashoka Youth Venture.
Kellner was elected as a Young Global Leader in 2009 by the World Economic Forum. He is a Member of the Council on Foreign Relations; Crown Fellow, The Aspen Institute; Member, Pacific Council on International Policy (PCIP); Member, International Institute for Strategic Studies (IISS); and Member, North America Council of Ashoka. He received his undergraduate degree from Princeton University and was a Fulbright Scholar to Hungary after college. He received a J.D. from Yale Law School and an MBA from Harvard Business School.
Q: What drives you to get up in the morning?
Kellner: I like interacting with people who are working to change the social landscape around them for the better. Consider Charles Best of DonorsChoose.org, an Ashoka Fellow, who enables teachers with better tools and environments and in doing so enables students to achieve. He makes an impactful, concrete difference daily and it is scaling across the nation. Charles isn't looking for your vote, but he's the kind of citizen you want acting in your midst.
Q: Your Endeavor non-profit organization, which is designed to foster entrepreneurship, has opened an office in Jordan. Arab nations have one of the lowest levels of (non-religious) education in the world and produce fewer patents combined than Italy by itself, let alone the tech leading countries. How is this region going to be a hotbed for free enterprise?
Kellner: When we launched in South America, people said there were no entrepreneurs in Latin America. In six years, we found entrepreneurs exiting businesses for $500 million. In Jordan, we selected two entrepreneurs last month I think are home runs one would never have imagined in Amman and Palestine. One may become the pharmacy retailer CVS of the Middle East and the other the leading teacher training company in the Middle East. Before last month, people could have said no one like Amjad Aryan of Pharmacy 1 or Amin Amin of CADER existed. The difference is Endeavor went looking and they are there. Entrepreneurship is a human condition and you will find them in Amman just as you will find them in Palo Alto.
Q: According to Forbes, Uhuru's fund managers receive the usual 2 percent management fee plus 20 percent of profits. Uhuru gets 1% of assets annually plus 10 percent of overall gains over a T-bill benchmark. Assuming the 1 percent just covers overhead, the philanthropic benefit will come out of the 10 percent carry. Why do you think this model of "blended" social investing is best?
Kellner: I don't believe in other people subsidizing my mission; they deserve the expected return. Our model has our allocation to social entrepreneurship coming from management's profits, not the investors. This requires that anyone who signs up to work with Uhuru has to buy into the mission.
Q: What should people in Colorado be focusing on in their own businesses right now?
Kellner: In any economic environment you should identify your best people and not stop investing in them. This is especially true in challenged conditions like the present.
Q: We see you're a member of the Aspen Institute. How's your skiing form? Better on powder (West) or ice (East)?
Kellner: We've had a home in Aspen since 1989, and I have had some great years of powder. It doesn't get any better than Colorado.
Extra: Peter Kellner on Forbes.com
Peter Kellner has been a venture capitalist and a private equity guy, and, soon, he'll launch a fund of hedge funds, but while his brain is in finance his heart is somewhere else: Changing the world. As co-founder of Endeavor, a non-profit that helps small and medium-sized companies in emerging nations perform better, he helped build an organization that has aided 330 entrepreneurs who now employ 86,000 people. I sat down with him a couple of days ago after he spoke to Pamela Hartigan's class on social entrepreneurship at Columbia University to find out about Endeavor's latest expansions. Here's why the organization is setting up an office in Jordan.