Faith-Driven Asset Manager Interview Series: An Interview with Matt Monson of Sovereign’s Capital

bryan-taylor

The Chief Operating Officer of Cornerstone Management, Winters Richwine, conducted this interview with Matt Monson from Sovereign’s Capital.

Tell us about your professional background.  How did you connect with Sovereign’s Capital?

I have a background in investment banking, private equity, and public equity investing before joining Sovereign’s Capital. Like many other believers, my faith had grown into the most important part of my life. One day my wife and I had been praying through how I might better integrate faith and work, and the next day while my wife was chasing a child of ours at a park, our child was running circles around a stranger that said on his cell phone, “Christian private equity fund…Sovereign’s Capital.” My wife said it felt like getting struck by lightning. The second miracle is that I made contact with one of the co-founders of Sovereign’s Capital within the next few days. Three years later I was fortunate to join Sovereign’s Capital to launch their public equity investment practice.

Talk about Flourish Fund. What are your goals for the strategy, and how did you develop the idea?

In the Flourish Fund ETF (ticker: SOVF) we invest in U.S. public companies that are led by faith-driven CEOs who are developing exceptional cultures to enable their employees to flourish. Companies in our portfolio are utilizing chaplains in their facilities, hosting Bible studies or prayer groups, serving their employees with above market HR benefits, or underpinning the values of the company with servant leadership. We believe that characteristics such as these build exceptional corporate cultures, which can attract and retain some of the best talent, and that companies with strong talent have the potential to produce strong financial results.

We have a two-part mission to generate financial performance and kingdom impact. Subconsciously, I think most of us believe there is a tradeoff for all things in life. However, the type of kingdom impact we focus on maximizing in our investment portfolio, we believe contributes to greater investment returns. Therefore, we believe there is no tradeoff, but in fact, kingdom impact and financial performance are correlated.

The idea for the Flourish Fund ETF was really an extension of our investment thesis we have been refining since we founded the firm in 2012. It has long been our dream to be able to serve the marketplace with a faith-driven investment fund that maximized kingdom impact, while also offering daily liquidity, and access to every individual investor without a minimum investment or a minimum net worth. The Flourish Fund ETF was the clear answer to achieve that dream.

You recently hosted a roundtable of public company CEOs. What was most inspiring about that gathering?

When an investor buys shares in SOVF we are thrilled to share with them two layers of impact. First, our investors are aligning their capital with companies that we believe are truly enabling their employees to flourish. Second, we seek to serve the CEOs of the companies we invest in, so we invite them to meet one another and hear best practices directly from their peers at in-person roundtables. In August 2023 we brought together eight public company CEOs and one head of culture, and those nine companies collectively represented 42,000 employees. Coming out of that session, the CEOs in attendance have been implementing multiple best practices they learned from each other, including chaplaincy and employee benevolence funds. We are honored to share with our investors that their capital enabled public company CEOs to meet each other and to take tangible steps towards further supporting their employees.

Where do you see the faith-aligned investment industry headed in the next few years?

At Sovereign’s Capital we spend 1% of our time ensuring we avoid companies involved in industries that come into conflict with human flourishing, and we spend 99% of our time looking for the needle in a haystack to come alongside faith-driven CEOs that care deeply for their employees. We think there is a huge opportunity for existing faith-driven managers to adopt positive screening strategies, and we believe many new managers will enter the space of faith-driven investing in the years to come. I believe faith-driven investing is just getting started!

Winters Richwine