Bringing Sustainable Private Placements to Investors

Editor's note: This article first appeared in the Q1 2022 issue of Morningstar magazine. Click here to subscribe.

Max Mintz is making a wider impact with sustainable investing.

Mintz is a partner and financial planner at Common Interests, an advisory firm based in Metuchen, New Jersey, that gives clients access to customized private placements with a high social impact. Private placements are an asset class generally available only to high-net-worth investors. But Mintz has sourced private placements ranging from tree farming to affordable housing to waste recycling, with investment minimums as low as $700.

“It’s our way of helping to try to democratize access to the high-impact private investments population,” Mintz says.

The firm is committed to making an impact not only with the investments it makes, but also in how it conducts its business. For one thing, Common Interests doesn’t have investment minimums for clients, and people with lower incomes can pay fees on a sliding scale. (Clients with sufficient assets pay the typical annual fee of 1%). To make sure the firm benefits its community, a minimum of 75% of clients are local, to minimize its carbon footprint. And at least 75% of its assets under management are managed for individuals outside of the firm’s circle of family and friends.

Prospective clients are required to fill out a detailed behavioral questionnaire that probes their opinions on statements such as “I avoid eating fast food,” “Human lives are more important than animal lives,” and “CEOs should go to jail when they commit a white-collar crime.” The results are used to guide discussions that help Mintz customize the firm’s model sustainability portfolios in accordance with a client’s values. They also help screen out those prospects who aren’t a good fit. Occasionally, a prospect taking the questionnaire generates a “null” result, which means the firm won’t take them on.

“We are looking to work with clients who share our values, who want their money to be put to work in a way that is congruent with the rest of their lives,” Mintz says.

At a time when climate change and social issues have come to the fore, Mintz’s approach has resonated with clients. Assets under management in November were approaching $90 million, up from $43 million in January 2019.

A Mix of Science and Arts

Mintz, 34, forged an unorthodox path to a career in financial planning. It was partly serendipitous, but also a natural extension of his interests.

Mintz had a knack for science at an early age, building Lego models and tinkering with computers with his dad, a programmer. He built his first computer around age 15 and went to a magnet public high school for engineering. He developed an interest in the engineering circuit boards, taking a course in digital logic at the local community college, then became interested in logic itself, which brought him to philosophy.

His mom’s political and social work helped shape his worldview. Mintz majored in philosophy at Rutgers University, taking to the notion of effective altruism, a research field that uses evidence and reasoning to determine how to help others as much as possible by focusing efforts on the most promising solutions to the world’s most pressing problems.

When he graduated in 2010, job opportunities were slim, with the national unemployment rate approaching 10%. He took a job as an analyst for an insurance trade group, poring over lawsuits that auto insurers lost in order to recommend ways to prevent future plaintiffs from winning. Disenchanted, he lasted a year at the post. “It sucked my soul out through my eyeballs,” he says. “I just wasn’t set up for that.”

Bob Goellner, managing partner and founder of Common Interests, in 2012 was searching for an employee to help shift the firm’s focus to investing around environmental, social, and governance issues. Goellner, now 78, was not one to enter retirement himself, but he needed assistance to grow the firm and develop an heir apparent. Goellner also happened to be the financial advisor for Mintz’s parents and had guided Mintz during his teenage years with his own account. Mintz’s mom recommended him for the job, and Goellner gave him a chance.

Goellner hired Mintz in part for his intellect and sense of values, with the understanding that he would help build out systems to enable the firm to focus on ESG—and eventually get the opportunity to work with clients.

“I wasn’t sure I wanted to be an advisor,” Mintz says. “I was afraid I was going to have to cold call, and I hate selling things.”

But cold calls weren’t necessary. Mintz, who has built all the office’s computers himself, used his tech savvy to write search engine optimization terms to attract like-minded people who wanted an advisor for sustainable investing. Mintz found he liked helping out these clients. He became a financial planner in 2016 and now shares the book of business with Goellner.

An Uncommon Approach

Common Interest’s house view on sustainability investing starts with the 17 Sustainable Development Goals established by the United Nations, which include gender equality, affordable and clean energy, good health and well-being, and ending poverty and hunger. The firm then uses YourStake, an organization that facilitates sustainable investing for advisors, for due diligence to come up with a list of prospective exchange-traded funds and mutual funds. Mintz uses Morningstar Direct to evaluate the performance of these investments.

All of the metrics help Mintz come up with model portfolios. Mintz then uses that initial questionnaire, which is developed by YourStake, to customize client portfolios at the asset-class level by removing and adding funds as necessary.

“We report back to our clients on the issues that are the most material to them, to see if the funds and the investments that we’re choosing are a good fit,” Mintz says. “Sustainability and values mean different things to different people.”

For example, a vegan may have concerns about retailers that sell luxury goods. A client who cares deeply about social justice might have an issue with a fund that holds a health-services company that has private prisons as customers.

Performance matters, too, of course, and Mintz keeps a close eye on the numbers. He offers as an example the firm’s moderate aggressive model portfolio. Over the past 10 years, it was up about 250 basis points over its custom benchmark, which includes the MSCI EAFE, the Russell 3000 Total Return Index, and Bloomberg Intermediate US Government and Credit Bond Index, according to a recent report generated from Morningstar Direct.

“You’ve got to have competitive performance and deliver alpha and competitive risk-adjusted returns,” Mintz says.

All the while, he and his clients make an impact.

More about Mintz Max Mintz, partner and financial planner, Common Interests.

How he caught our eye: Provides impact-investing opportunities to ordinary investors, and tailors portfolios to each client's sustainable-investing views.

Career path: Graduated from Rutgers University with a Bachelor of Arts in philosophy. His first job, helping insurers write exclusions into auto policies, wasn't the right fit. Advisor Bob Goellner, founder of Common Interests, took a chance and hired the young Mintz, who was only 25 at the time, to help the firm reorient as a sustainable-investing practice.

Personal: Married, and plays Dungeons & Dragons once a month with his wife and friends. Mintz is also a huge Star Wars fan, and he built a Lego model of Han Solo's Millennium Falcon starship that can be seen in the background during Zoom calls. Wicket, his Tibetan terrier, is named after an Ewok that befriends Princess Leia in Return of the Jedi. Mintz builds his own computers for the office and at home; he says he gets more bang for the buck that way.

Favorite funds: Likes ETFs and mutual funds that meet screenings by YourStake, an organization that caters to financial advisors who specialize in sustainable investing.

Charles Keenan is a freelance financial journalist.

Photography by Christopher Lane.