Claudio Scardovi - Gen Z and the Future of Wealth: Sustainable Investing and Wellbeing for Our Next Generations

GEN Z AND THE FUTURE OF WEALTH

The world has never been so rich at least financially. And so unsustainable economically, socially and environmentally. In fact, we are all living a nemesis of wealth (nealth), caused by our short-sighted choices of the past, which focused only on ROE, NPV and shareholders value. This nealth is now paying us back not only with loads of public debt, inflationary money and debased cryptocurrencies; but also with unbearable social discrimination, geopolitical tensions and wars and de-globalization; and last but not least, with the ticking time bomb of climate change. If this is the legacy of our intergenerational arbitrage, what is the future for the Gen Z and for the Gen Alpha to come? How can they manage and overcome all these unbearable burdens to regain the lost sustainability? A new definition of wealth, based on a more holistic total sustainability, is then required; and correspondingly, new models to design, manage and value a targeted wealth creation that is relevant to many stakeholders. Never has been the challenge of change for the wealth management industry so critical as in the future of wealth, and of its industry, could lie the future of humanity as well.

Claudio Scardovi is founder and CEO of HOPE SICAF. He has been managing director and global co-head of FIG at AlixPartners, managing director and head of FIG for Italy at Nomura and Lehman Brothers, managing director and Head of Italy at Oliver Wyman, operating partner at Advent International and founder and CEO of Intervaluenet, an incubator. He is teaching professor at SDA Bocconi School of Management and the Imperial College. He has published several books with international publishers and is author of more than 200 articles and papers.

Claudio Scardovi

Sustainable Investing and Wellbeing for Our Next Generations

Premise by Larissa Iapichino

Foreword by Cristiana Capotondi

Cover: Cristina Bernasconi, Milan

Typesetting: Laura Panigara, Cesano Boscone (MI)

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First edition: July 2022

ISBN Domestic Edition 978-88-99902-89-6

ISBN International Edition 978-88-31322-65-2

ISBN Digital Domestic Edition 978-88-238-8472-4

ISBN Digital International Edition 978-88-31322-66-9

For Benedetta and Berenice,

the alpha stars of what will come next.

A Premise from Gen Z for Gen Alpha

by Larissa Iapichino

Reading these pages, which also have an impact on our future as Gen Z, many themes are brought to mind.

Firstly, how sustainable is our attitude to consumption and how green are we in our daily life? As young people we would love to live in a better and fairer world, to be more sustainable, and not to waste what can be saved for others wellbeing.

Fairness means ensuring everyone has the same opportunities to grow up with equal rights in terms of learning, practicing sports and being cared for.

Via my participation in the HOPE Sicaf committee I sincerely want to represent a young generation willing to one day rule its life with strong values and I believe that todays healthy investments are the basis for this.

Wealth also needs to be used for building infrastructure which will allow an optimized, sustainable well-being, and I believe Mr Scardovi has been found a good recipe to succesfully solve this fundamental dilemma.

But also the way in which funding will be recovered is meaningful and significant: this book outlines a new way to get this done.

Reading these pages is useful for us, Gen Z, to have an overview of the economic and financial trends which nowadays are the most urgent to be understood for our future.

I would definitely recommend reading this book to have a deeper view and to shape opinions to help us understand of our role in this world even more.

Foreword

by Cristiana Capotondi

In 2021 I became a member of the Sustainability Committee at HOPE, an alternative investment fund. I decided to join because I think its main objective is fascinating to put back at the center stage of finance the Italian small and medium enterprises, and with a view of pursuing a total sustainability economically, but also socially and environmentally based. The very fact that the traditionally exclusive world of finance is opening up its inner sanctum and decision making to people from the world of humanistic culture and from the new generations, signals a search for a new way of doing things and for more lateral thinking.

Certainly, there are rules that must be followed to achieve success, as there are others that we need to keep during normal times and others that are instead required during times of great change. In fact, we live today in flux, with great transformations and challenges. During times like this, we need to be brave enough to even question Adam Smith, as indicated in the incipit of the book, and his concept of the invisible hand. Maybe this is because his economic vision cannot be applied to times of great disruption, like ours. More specifically, the digital revolution is changing our world in new ways. The huge decoupling between those able to embrace the new digital world and those left behind will be brutal if no rules and no state intervention were in place to balance the resulting economic, social and ecological tensions. The very economic growth and wealth creation that our country has been able to sustain after WWII would be put at risk.

Because of all this, I believe there is a profound need to rethink the culture of our contemporary times, not just in economic, but also in social and environmental terms. This is the mission of my association (IoSono) that seeks to help people in gauging how much technological innovation and the core values of liberal democracies, are today at stake and endangered by top down and so called pragmatic policy-making; and in understating how they can in fact become sustainable only if they are nurtured by a humanistic culture.

We often speak of never-ending humanism to really mean how our never-ending soul searching should be at the basis of each of our actions. We are born to know ourselves, and to then open up from our most inner self to meet and know other people. We love having others to love and fulfil us and overcome that stupid and vexatious dichotomy between egoism and altruism. Adam Smith had fully understood how the wealth of nations is born out of the righteous need of individual organization and success. But maybe he had not fully appreciated or clarified how, behind the utilitarian, selfish motivation of an individual, and behind the very same idea of human being, we need to assume (and advocate) something more profound and even spiritual. As individuals, we are nothing if not understood in the context of our holistic relationships with other fellow human beings and with the larger ecosystem of Planet Earth. This is the ultimate meaning of ESG (Environmental, Social and Governance). Not a new fad or a passing fashion, but something much more profound, critical and urgent that we need to understand and act upon, to pursue a positive impact for us and our future generations and drive change, for good.