We’ve witnessed record-breaking trends and deal activity over the last two years within M&A, despite everything that has taken place in our global landscape. According to Bloomberg, 2021 posted $5 trillion in deal closes. Founders and business owners seeking to sell, or exit are motivated by multiple factors such as the pandemic, economic uncertainty, and notably personal transitions that have resulted in this record-breaking period. With such large transactions taking place, this leaves the question as to what impact our industry has been able to have on our community. We believe the one thing that has stood the test of time and will continue to be a driving force is that M&A will continue to be seen as a significant opportunity – that is a desire to build legacy from exit to impact.
STS stands for Success to Significance™ through Selling to Strategics™, an adage we have practiced and embraced since our first day of operations in 2003. We have strived to deliver excellence and elevate social impact causes across the globe through our network and partnerships. STS is committed “to creating billions of dollars in new philanthropic and impact capital through M&A.” We’ve embraced our Founder’s Oxford University thesis around “Strategic Philanthropy,” multiplying our ability to do good for others by aligning our firm’s success with our clients and advisors unlocking their full legacy potential. When founders and business owners trust STS Capital Partners to maximize their outcomes, leveraging their Extraordinary Exit creates additional capacity to drive lasting impact for themselves and their charities of choice.
A recent April 2022 article from the Financial Post highlights that over the next decade, an estimated $30 trillion in wealth will exchange from the hands of Baby Boomers to younger generations. This “great wealth transfer” will not only be a significant shift in our society but have far-reaching implications for business and society. One of the biggest topics of debate amongst financial leaders and experts is this real impact on our global communities. A more significant and long-term shift of wealth will move into other areas outside the traditional stock market, seeing better impact-driven opportunities for future leaders to create effective and sustainable change. Financial capital is moving hands, and we expect business as we know it to change. This wealth transfer is no longer going to impact just ESG funds, but every aspect of business will have the ability to be redefined.
Investors globally and trustees of family wealth are challenging the ethics and the actual impact behind large firms using ESG investing as a tool rather than a pillar of change. Recently in the press, we have seen several industry leaders and influential individuals question the longevity and sustainability of these altruistic values. In a recent Bloomberg article titled “Goldman Investigation Tarnishes ESG Halo as Investors Bail,” they analyzed the true impact behind ESG investing and pulled the curtain back on the doubts investors in the industry are placing. Based on a report from Bank of America, ESG funds are declining in the first half of 2022, the steepest decline since before the pandemic began.
Where the industry may see a decline or be facing skepticism, at STS Capital, we’ve seen an increase in philanthropic impact through M&A. Our clients, founders and entrepreneurs, want to have a direct impact through their philanthropy and have doubled down through M&A transactions. Most recently, we’ve worked on Project Quattro, where we saw two brothers achieve an Extraordinary Exit and establish family foundations with long-term investment and plans to create generational wealth with their children.
Established leaders, such as Bill Gates, gave away over $30 billion in the last decade to charities and foundations to do good and lead change for our global community. As inspiring as it is to see what one leader has done with his incredible wealth, we know it isn’t the norm. An immense opportunity is brewing for more individual entrepreneurs and impact-driven families to drive significant change, using the proceeds from their exit or by those who think creatively and believe M&A can be utilized as a vehicle for good.
Empowering entrepreneurs to drive change versus relying on large-scale ESG investments is an approach we favor. STS Capital can create a tangible, direct avenue to unlock impact and legacy for our clients and advisors. In addition, we provide access to legacy coaching and tools to drive charitable contributions. To date, STS Capital has been responsible for helping contribute hundreds of millions of dollars to family foundations and charities through supporting our clients and advisors. We view this as just the beginning.
Managing Director and Success to Significance Co-Chair Shamil Hargovan has championed this program and is a crucial resource by providing strategic and impact-driven insights for our clients and advisors.
“Over the next decade, we expect STS’s Significance program will grow to become an even more vital part of how we develop our business. Our goal is to unite business leaders who aim to create a lasting legacy for our local and global communities and help each other successfully drive impact. Furthermore, our ask of you is if you would like to raise funds for your charity, please contact us, and we can support you in developing your program.” – Shamil Hargovan.
Purpose and profit can co-exist if guided through a transparent and deliberate strategy. The Success to Significance program can help assess the social and environmental impact you aim to achieve. Then, through a balance of financial and philanthropic incentives, altruistic endeavors can be sustained through strategic philanthropy. At STS, we’ve called upon our network and have had them become a part of our philanthropic goals. This results in a more meaningful collaboration of community where our massive transformational purpose of “creating billions of dollars in new philanthropic and impact capital for the world through M&A” is not only a mission statement but a practice in our day-to-day operations.
We are growing our Impact Advisor program to bring together business leaders, charities, and philanthropic families. If you’re interested in helping us reach our maximum legacy potential and the STS Capital Partners opportunities available for you, other private business owners you may know, or charities you support, please contact us via email at contactus@stscapital.com.
