CREO Syndicate brings unique model to family office space

In a field defined by maintaining and increasing massive amounts of wealth, CREO Family Office Syndicate stands out: a public charity that works with FOs in the private equity space, focused on an overriding mission that transcends the search for wealth.

And it looks ready to make waves.

CREO — Cleantech, Renewable Energy and Environmental Opportunities — may be a 501(c)(3) public charity, but that did not stop it from announcing this week that it was teaming with Caisse de dépôt et placement du Québec, the pension manager controlling more than C$300 billion, “to foster more capital into climate investments by creating new opportunities, sharing expertise and exercising stronger climate leadership within the industry.”

CREO’s website says it aims “to address some of the most pressing environmental challenges of our time affecting communities across the globe — climate change and resource scarcity — by catalyzing private capital into innovative solutions to protect and preserve the environment and accelerate the transition to a more sustainable economy for the benefit of the public.”

President and Chief Executive Régine Clément said CREO exists as an intermediary for like-minded family offices to find and learn from each other by facilitating communications as well as putting on educational events for members. It does not invest any money itself.

“We believe strongly in building relationships amongst investors, so that when there is an opportunity to invest, acquire, a company that is aligned with the mission, these families can either leverage us as a team to identify which families would be a good fit for an investment, or as an acquirer, or as they develop relationships through these convenings can do that themselves,” she said.

CREO came into existence in 2011 when a handful of like-minded family offices decided to work together in the shadow of the 2008 financial crisis, said one of its founders, Jason Scott.

“I think we felt like it would be beneficial to get some of the families that we were seeing looking at similar deals and opportunities and to try to not just share deals but share lessons learned and other things,” said Scott, who is co-chairman of CREO’s board and a co-managing partner at Encourage Capital.

He also served on former President Barack Obama’s transition advisory boards for technology and innovation and energy and the environment.

Christian Zabbal, another CREO founder who co-chairs the board with Scott, said the idea to make CREO a public charity made accomplishing its core mission easier.

“We wanted to make it clear that there was no agenda other than to come together to make each of the members more successful. And the easiest way to signal that and the easiest way to actually make sure that happened was to make it a nonprofit,” Zabbal said. “That way CREO exists to make the members more successful, and it doesn’t have another agenda other than to sustain itself.”

Zabbal, who is also managing partner at Spring Lane Capital, sees CREO as a critical tool to help like-minded family offices to learn how to most effectively align their investments with their overall mission.

“They’re going to meet through CREO a number of different families that have done it, that have gone through the same obstacles, that have gone through the same evolution, and as a result they learn a lot faster,” he said.

CREO has about about 70 family offices as members, and works with around 150 families and family offices, according to Clément. She added it is slowly globalizing, with member families from Europe, Latin America, India and Pakistan, and will open a new office in London by year-end.

CREO’s members include Prelude Ventures, Laird Norton Co, Inherent Group, Forsythia Foundation, Next World Evergreen, and Grantham Foundation for the Protection of the Environment. Clément said membership has grown entirely through referrals.

At a CREO meeting in New York this week, CDPQ Chief Executive Michael Sabia engaged in a Q&A with members, which Scott described as “incredibly powerful.”

“Here you have this incredibly economically and financially sophisticated person with huge pension liabilities and responsibilities to their pensioners saying that investing in solutions to climate and ways to make society more resilient and successful in a climate-challenged world are also very, very smart financial investments,” Scott said.

“We want to take our learnings and bring it to the broader industry,” Clément said when asked about the partnership with CDPQ.

“In the financial industry, there are many silos, and information flow is one of the biggest challenges,” Clément said. “Pension funds typically don’t talk to family offices, family offices typically don’t talk to VCs, VCs typically don’t talk to private equity, and so these silos are really creating hurdles for the advancement of our mission.”

Organizations like CREO are rare. Richard Wilson, a family office professional and author who runs Family Office Club, said the vast majority of the membership organizations he knows of in the family office world are for-profit.

Christopher Geczy, academic director of Jacobs Levy Equity Management Center for Quantitative Financial Research at the Wharton School at the University of Pennsylvania, said the CREO idea sounded interesting.

“I like the idea generally. Families do seem to need a facility for working together, and one that is absent a sales motive is very interesting,” he said via email.

CREO’s founders hope its mission catches on with the industry at large.

“The more participants do well, the more CREO members learn how to do this and share their lessons amongst each other, the more the capital flows into that space, which creates more impact,” Zabbal said. “It’s a virtuous cycle, and we kind of see CREO as helping drive that virtuous cycle.”

“It’s the evolution of investing, it’s the evolution of where capital is going to its most productive use,” Scott said.

Correction: An earlier version of this story gave an incorrect tally for the number of CREO’s family office members. The organization has about 70 family office members. The story has been updated.