April 9th 2013 – Wall Street Journal

Amy Or | April 09, 2013

Investing in lifestyle trend to change one’s own style… bye bye Chinese factories!

For former Carlyle Group Director Edward Man, investing in a lifestyle trend has changed his own lifestyle. Not only is he no longer visiting factories in remote parts of China, he is also engaged in things he truly likes—lifestyle investing and philanthropy.

The Associates, the private equity firm he launched, recently backed Detroit Electric, an electric car maker whose history dated back to 1907. The company’s past clients have included Thomas Edison and the wives of former President Dwight D. Eisenhower and Henry Ford.

The private equity firm stands to attract more attention in China when Detroit Electric announces a partnership with a big Chinese auto company at the upcoming Shanghai auto show on April 20.

Lifestyle investing, as the Associates defines it, involves product and services that Mr. Man enjoys using as much as investing in them.

Being a wine buff and foodie, Mr. Man’s second investment helped bring the Spanish restaurant Catalunya to Hong Kong. The restaurant is backed by the same culinary team behind the famous but now-closed Spanish restaurant El Bulli.

Apart from headline-grabbing investments, the Associates also maintains a strong commitment to philanthropy.

“We want to employ an investment approach to handle philanthropy,” Mr. Man said. “Often with donations, there is doubt whether the beneficiaries really benefit.”

Although charitable organizations accounted for about $300 billion or 2% of the U.S. GDP, non-profits are often financially torn between spending to aid the needy and spending to reach a broader audience of donors. The Associates hopes it can resolve that dilemma with its investment expertise.

The firm plans to devote 80% of firm profits to establish a charitable endowment, approaching philanthropy much like it does investments: to maximize returns. However in this case, it measures those returns in terms of the benefits to the society.

And just as employees will take a slice of profits from investments, those that succeed with projects for social
good will also receive a bonus to keep them “incentivized.”

A believer that a charity should be run much like a business, Mr. Man said sometimes financial incentives are
needed to push non-profit organizers to think big and make the most social impact, instead of being confined to spending every dollar on recipients, which sometimes may limit the benefits.

Mr. Man said the firm has so far either donated or helped raise over $1 million to aid the funding of scholarships and school operations. For example, one of the firm’s employee recently went on a two-week visit, fully funded by the Associates, to an orphanage in Malawi, bringing not only books and stationery, but also money raised that allowed the admission of 20 more orphans, Mr. Man said.