business book bestseller list 22 university curricula: mba ... · published 2010 (john wiley &...

Published 2010(John Wiley & Sons)

*Amazon.com

*BetterWorldBooks

* Wiley.com

Business Book

Bestseller List

22 University Curricula:

MBA, MPA, Finance

Global Libraries

on 5 Continents

© 2006-2012 HIP Investor Inc. 1

http://www.hipinvestor.com/the-hip-investor-book-pre-order-available-now/

http://www.hipinvestor.com/the-hip-investor-book-pre-order-available-now/

How HIP Helps Investors

CONFIDENTIAL © 2006-2015 HIP Investor Inc. 2

1. HIP RATINGS:Research, analyze & score

4500 corporate equities & bonds,

and 9000+ munis/treasuries/agencies

…on Future Risk & Upside Potential,

and Net Impact on Society

2. HIP STRATEGIES:Manage HIP-weighted investment indexes + portfolios

3. HIP PORTFOLIOS + 401(k)s:License HIP Ratings to fund managers,

wealth advisors, and 401k’s

HIP textbook in

22 university &

MBA curricula

The Value of Human Capital

+

How Investors Can Finance Sustainable Prosperity

October 3, 2015

THIS IS COPYRIGHTED MATERIAL. © 2006-2015 HIP Investor Inc.

Disclosure and Disclaimers


HIP Investor Ratings LLC is a California limited liability

company, providing 13,500+ ratings of global

investments and funds for investors, family offices,

advisers, fund managers and retirement plans.

R. Paul Herman is a registered representative of

HIP Investor Inc., an investment adviser registered in

the States of California, Washington, and Illinois, with

clients across the USA.

This is not an offer of securities. All investing has risks.

Full disclosures at www.HIPinvestor.com

Past results are not indicative of future performance.

http://www.hipinvestor.com/

Disclosure on HIP’s“Best Companies To Work For” Portfolio


Pop Quiz:

What is

your company’s

most important ASSET?


Most important asset?

•A. Brand

•B. Ideas, patents, I.P.

•C. People

•D. All of the above



2003 Survey

If People Are Important:

Where are People on the financial statements?


…where on financial statements?

•A. Expense (on inc.stmt)

•B. Liability (on bal.sheet)

•C. Asset (as “goodwill”)

•D. All of the above


84% of Market Value = Intangible


17%

32%

68%80% 84%


Ocean Tomo Patent ETF (OTP)

Intangibles Index Beats S&P500 (12/29/06 to 3/05/12,

this ETF was retired despite positive performance)

+7.7%

-3.9%

“Total wealth includesall sources of ‘income’ or

consumable services. One

such source is the

productive capacity

of human beings.”

– ‘The Quantity Theory

of Money’ (1956)

Nobel Laureate in EconomicsDr. Milton Friedman


http://money.cnn.com/magazines/fortune/bestcompanies/2011/full_list/


http://money.cnn.com/magazines/fortune/bestcompanies/2011/full_list/

Wharton Professor Alex Edmans’Peer-Reviewed Academic Analysis

“Does the

Stock Market

Fully Value

Intangibles?

* * *

Employee

Satisfaction

and Equity

Prices”http://www.AlexEdmans.com


http://www.alexedmans.com/


“Best Companies To Work For” Equities Have Outperformed

Source: Russell Investment Group, via

© Great Places To Work® Institute

1997-2014, ANNUALIZED RETURNS

Best Companies Have Outperformed

Cumulatively since 1997

http://www.greatplacetowork.com/what_we_believe/graphs.php


Investing in “100 Best” to Work For Can Beat the Market (1997-2014)

Source: Russell Investment Group, via

© Great Places To Work® Institute

1997-2014, ANNUALIZED RETURNS

Best Companies Have Outperformed Cumulatively

since 1997

http://www.greatplacetowork.com/what_we_believe/graphs.php


Parnassus Workplace Fund (PARWX)

One Mutual Fund Invests in “Best Companies to Work For”

(4/21/06-10/6/15)

+84.2%

+53.7%

HIP’s “Best Companies to Work For” Index(6/27/2013-6/30/2015)


This is not an offer of securities. All investing has risks.

Full disclosures at www.HIPinvestor.com

Past results are not indicative of future performance.


“There is one and only one

social responsibility of

business – to use its resources

and engage in activities designed

to increase its profits so

long as it stays within the rules of

the game, which is to say, engages

in open and free competition

without deception or fraud.“

– New York Times (1970)

Nobel Laureate in EconomicsDr. Milton Friedman (14 years later)


“Employee Satisfaction, Labor Market Flexibility, and

Stock Returns Around the World”(Alpha, Beta, R-squared: Sept 1997 to Dec. 2013)

CONFIDENTIAL © 2006-2012 HIP Investor Inc. 23http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2461003

Denmark

Greece

Germany


In January 1967 !!

Source: Harvard Business Review

R.G. Barry Corporation (ticker: DFZ)’sHuman Capital Grew Profit +12.4% in 1969


Higher Profit = +12.4%Source: Harvard Business Review

R.G. Barry Corporation’s Assets Grew +7% With Human Capital on Balance Sheet


Higher Asset Value = +7%

Source: Harvard Business Review

I. Historical Cost

II. Replacement Cost

III. Opportunity Cost

IV. Present Value (PV) of Compensation

Valuing People As an Asset:4 Main Methodologies


Quantifying Human Resource Value:4 Examples – Leadership In India

I. Historical CostIV. Present Value (PV) of

Compensation

5,000

employees

1,159

32,826

133,560

employees

Southern

Petroleum

Industries

© 2006-2012 HIP Investor Inc. 29Source: HIP Investor research

India Cement Company: Workforce

© 2006-2012 HIP Investor Inc. 30Source: HIP Investor analysis

India Cement Company: People Value


USD $48.7 million $45.1 MM $38.5 MM

Source: CCI/ICC; HIP Investor analysis

Infosys’s Annual Report Calculates Human Capital


USD $25.7 Bil $21B

ROI-HR: 5.1% 5.5%

Source: Infosys; HIP Investor analysis

From 1998-2011, InfosysGrew the Value of its Human Capital

© 2006-2012 HIP Investor Inc. 33Source: Infosys; HIP Investor analysis

Average Employee’s Human Capital Value at Infosys Grew Over 14 Years

© 2006-2012 HIP Investor Inc. 34Source: Infosys; HIP Investor analysis

Infosys Has Grown Its Market Value By Investing in Its Human Capital


How Human Capital Can Appreciate – or Depreciate

Beginning

Stock of

Human

Potential

Annual

Depreciation

Annual

Investment

Annual

Appreciation

Ending

Stock of

Human

Potential

Annual Flows

Training

Education

_+ + =

# Employees

Wages

Education

Tenure

Health

Benefits

Absence

Injuries

Turnover

Step

Promotion

Engagement

Wellness

Programs

Knowledge

Decay

Developed by:

Source: Interface

$-

$100

$200

$300

$400

$500B

egin

nin

gS

tock

Dep

recia

tio

n

Inve

stm

en

t

Ap

pre

cia

tio

n

En

din

gS

tock

Interface HC Pilot: Impact of Human Capital Flows($ in millions)

(Net Depreciation: (6%)

Net Appreciation/(Depreciation) of Human Capital

Note: data reflects only those employees that were included in the Human Capital Stocks & Flows pilot

Source: Interface

Calculating Stock of Human Potential

Employee Wage Education Tenure

Employee Country Position

Annual

Wage

Years

of

Education

Appreciation

per Year of

Education

Adjusted

Annual

Wage

ABC Netherlands Production 52,147$ 10.0 8% 93,864$

Tenure Time Value

Tenure

at

Interface

(years)

Average

Tenure

for

Position

(years)

Years

Remaining

at Interface

Adjusted

Annual

Wage

Discount

Rate

Corporate

Human

Capital

Stock

7.0 10.0 3.0 281,591$ 3.4% 272,069$

Source: Interface

Starbucks Capitalizes PP&E’s“Leasehold Improvements”: Why Not People?

© 2006-2012 HIP Investor Inc. 39Source: Starbucks

Recent Innovations in Valuing Intangibles and Human Capital

V. Calculated Intangible Value (CIV)*

VI. Human Capital Financial Statements** (HCF$)

*http://www.investopedia.com/terms/c/civ.asp#axzz1oIbCjM15

**http://www.hcminst.com/products-services/human-capital-financial-statement/


http://www.investopedia.com/terms/c/civ.asp

http://www.hcminst.com/products-services/human-capital-financial-statement/

Investing in Human Capital Can Be an Inflation Hedge and Has Been Uncorrelated to Stock Market Equities

• Funds investing in human capital can fit across asset classes: such as Venture Capital, Private Equity and Alternatives

Source: Lumni, Inc. (fund of human capital for student loans)


WHERE THE JOBS ARE!Hint: Solving Society’s Needs

Analyzing Job Growth by Sector from 2002-2011

1ST IN A SERIES

HIP Investor Inc. www.HIPinvestor.com

By R. Paul Herman and Tom Bowmer

Vintage: June 2012



This Analysis Is Based on Data Open-Sourced by the US Government, Accessible to All USA Taxpayers

• Sources: – Bureau of Labor Statistics, Employment, Hours, and Earnings – National (Current Employment Statistics -

CES), http://www.bls.gov/data/#employment– Bureau of Economic Analysis, National Income and Product Accounts, table 1.3.5 (2002-2011),

http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1– HIP Investor Analysis

• Definitions for Job Calculations (Unadjusted numbers used):– 1. BUSINESS SECTOR: Total private industry employees from the Current Employee Statistics survey.– 2. IMPACT SECTOR: Private industry employees from Health care, Education, & Social Assistance

subsectors in the Current Employee Statistics survey. – 3. GOVERNMENT SECTOR: Total government employees from the Current Employee Statistics survey.– 4. BUSINESS (w/out IMPACT) SECTOR: Total private industry employees from the Current Employee

Statistics survey minus Health care, Education, and Social Assistance subsectors.

• Definitions for GDP Calculations:– 1. BUSINESS: Equals gross domestic product excluding households, nonprofit institutions serving

households, and government. – 2. NONPROFIT INSTITUTIONS: Equals compensation of employees of nonprofit institutions, the rental

value of non-residential fixed assets owned and used by nonprofit institutions serving households and rental income of persons for tenant-occupied housing owned by nonprofit institutions.

– 3. GOVERNMENT: Equals compensation of government employees plus government consumption of fixed capital.


http://www.bls.gov/data/

http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1

© 2006-2012 HIP Investor Inc. 47Source: http://fraser.stlouisfed.org/docs/meltzer/maremp93.pdf

Great Depression: Deep Unemploymentand More than a Decade of Misery

© 2006-2012 HIP Investor Inc. 48Source: http://fraser.stlouisfed.org/docs/meltzer/maremp93.pdf

Current “Great Recession” Is Not as Deep,But How to Keep GDP and Jobs Growing?

2008-2015 to date

GDP Growth from Impact-Focused Org’s (NGOs & Government) Exceeds the Business Average


Source: Bureau of Economic Analysis, National

Income and Product Accounts, table 1.3.5 (2002-

2011); HIP Investor analysis

Business Growth: + 3.4%

Gov Growth: +4.3%

NGO Growth: +4.2%

3 out of 10 Jobs In USAFocus On Building a Better World

© 2006-2012 HIP Investor Inc. 50Source: Bureau of Labor Statistics; HIP Investor

analysis

~ 16%

~ 14%

~ 70%

GOVT + IMPACT = 30% of total JOBS

The Real “Job Creators”: Solvers of Society’s Problems


Business Sector (w/out Impact)

Government SectorImpact Sector

Cum. Growth -3.52% Cum. Growth +22.75% Cum. Growth +2.75%

Source: Bureau of Labor Statistics ; HIP

Investor analysis

The Impact Sector Is Adding JOBS Every Year

© 2006-2012 HIP Investor Inc. 52Source: Bureau of Labor

Statistics; HIP Investor analysis

JOB GROWTHJOB LOSS

Growth: 2.8%

Annual Growth: 0.3%

Growth: 22.8%

Annual Growth: 2.0%

Growth: -3.5%

Annual Growth: -0.4%

9.3 Million Jobs In BUSINESS Sector

Focus on IMPACT:

Education, Health Care

& Social Assistance


2.0 mm jobs

1.4 mm jobs

5.9 mm jobs

Source: “Holding the Fort” report by

John Hopkins Center for Civil Society’s

JH Nonprofit Economic Data Project;

Lester Salmon, S. Wojciech

Sokolowski, Stephanie Geller ; funded

by Charles Mott Foundation (with

estimated job calc’s by HIP Investor)

How Many IMPACT Jobs in BUSINESS today? At least 10%

These 9.3 million jobs represent ~10% of the

Business workforce in 2010

To Grow the Economy and Reduce Unemployment Requires the BUSINESS Sector to Focus on IMPACT

• Society’s needs are tremendous– Health care access is limited

– Access to capital for new ideas is constrained

– Natural resources are becoming polluted and scarce

• Business mobilizes talent and capital at tremendous speed– Biggest employer of talent, and typically highest paid

– Widest access to capital markets: equities, bonds, working capital

– Allocate human & financial capital to untapped opportunities

• Impact and Government Sector know the solutions– Compelling solutions to society’s needs are already discovered

– Partnerships for IMPACT across sectors are waiting for Business


Biggest Job Growth Driven by Positive ImpactOver the Last Decade (2002-2011)

© 2006-2012 HIP Investor Inc. 55Source: Bureau of Labor Statistics ; HIP Investor

analysis

Business Sector

Total

Business Sector

excluding Impact

Impact Sector (Health care,

Education, & Social Assitance) Government

Cumulative Growth 2002-2011 + 0.4% -3.5% + 22.7% + 2.7%

Annualized Growth Rate 2002-

2011+ 0.0% -0.4% + 2.1% + 0.3%

Annualized Growth Rate 2002-

2007 ("Boom Years")+ 0.7% + 0.4% + 2.2% + 0.6%

If BUSINESS Solved Society’s Needs, Creating Jobs at the Rate of the IMPACT Sector….

© 2006-2012 HIP Investor Inc. 56Source: Bureau of Labor Statistics ; HIP Investor

analysis

Actual Biz Jobs Projected Biz Jobs

Number of Business jobs at Impact Sector’s 10 year

annualized growth rate (2%)

Number of Business jobs at 1.5% job growth

rate

© 2006-2012 HIP Investor Inc. 57Source: Bureau of Labor Statistics;

http://www.cepr.net; HIP Investor analysis

http://www.cepr.net/

If BUSINESS Solved Society’s Needs like the IMPACT Economy, then Full Employment is Possible by 2015

© 2006-2012 HIP Investor Inc. 58Source: Bureau of Labor Statistics ; HIP

Investor analysis

Actual Biz Jobs Projected Biz Jobs

By 2015, full employment* possible

By 2020, full employment*

possible

*Full employment is defined as ~ 5%

HIP = Human Impact + Profit

HIPSolve Human Needs (Do Good)

Seek HigherProfits (Make Money)

CONFIDENTIAL © 2006-2012 HIP Investor Inc. 59Source: HIP Investor

HIP’s 5 Dimensions of Measurable ImpactCan Lead to Sustainable, Profitable Growth

• Physical Health

• Mental AgilityHealth

• Income Growth

• Asset AccumulationWealth

• Carbon Neutrality

• Reusable ProductsEarth

• Gender Balance

• Ethnic DiversityEquality

• Transparent & Open

• Credible & EthicalTrust

HIP companies innovate to answer five human needs:

Innovative Products + Services

Inspired People + Teamwork

Increased Profits + Returns

Improved Planet + Society

Which can result in sustainable, profitable growth for all stakeholders:


Health

Wealth

Earth

Equality

Trust

HIP Ratings: MethodologyEvaluation Tool for All Investments

Products

& Services

Operating

Metrics

Mgmt

Practices

“How HIP Is This Investment?”


Source: HIP Investor

Health

Wealth

Earth

Equality

Trust

HIP Ratings: MethodologyEvaluation Tool for All Investments

Products

& Services

Operating

Metrics

Mgmt

Practices

I

M

P

A

C

T

“How HIP Is This Investment?”


Strategic Innovation &

Risk Mitigation

Higher Revenue potential

LowerCost

potential


Impact Can Drive Higher Profit andShareholder Value, as MIT and BCG Show

A study by Boston Consulting Group and MIT Sloan Management Review discusses how sustainability is changing the competitive landscape and reshaping the opportunities and threats that companies face.

63

“Smarter Beta” Is Focused on Value Creation & Risk Reduction

Smarter Beta: Value-CreationFundamentals

Smart Beta: Financial

Fundamentals

Market-Cap-Weighted

Shareholder Value

Cash Flow: Revenue GwthDividend Gwth Profit Margins

People As An Asset

Natural Resource Efficiency

Valuation:P-E Ratios

Governance & Stakeholder Mgmt.

Transparency of Risks & Opportunities


Globally, Firms with More Diverse BoardsHave Yielded Higher Return on Equity (ROE)

CONFIDENTIAL © 2006-2015 HIP Investor Inc. 65Source: Credit Suisse

Women On Board

+4% ROE

( +33% Premium)

Credit Suisse calculates Outperformance of Global Firms with 1 or More Women on Board


No Women On Board

+5%

1+ Woman on Board

+40%

Source: Credit Suisse

5 Quantifiable FACTORS thatLink Directly to Shareholder Value

1. Customer Satisfaction

2. Employee Retention

3. Carbon Efficiency

4. Board Diversity

5. Legal Exposure


HIP Measures Knowable-Yet-Ignored FactorsNot Captured on Financial Statements

Smarter Beta: Value-CreationFundamentals

People As An Asset

Natural Resource Efficiency

Governance & Stakeholder Mgmt.

Transparency of Risks & Opportunities


Key Drivers of

Value + Risk

+ Customer Satisfaction

+ Employee Retention

+ Oil & water use

+ Energy mix

+ Board & team diversity

+ Supply chain mgmt.

- Legal exposure

- Lobbying ratio

Knowable Yet Ignored

Not on Financial

Statements


Harvard Professors:Sustainability Can BenefitPortfolio Value


+25% premium

+40% premium

Harvard Professors: Material Sustainability Can Greatly Benefit Portfolio Value

CONFIDENTIAL © 2006-2015 HIP Investor Inc. 70https://blogs.cfainstitute.org/investor/2015/07/07/esg-a-material-

information-advantage/

Increasing Choices for Impact Across Asset Classes

Higher Impact Choices for Your Portfolio

Cash

Economic empower-

ment credit unions

Eco-focused banks

Fixed income

Muni Bonds

Microfinance

Mezzanine Debt Funds

Income Generating

Appreciation

REITs

Preferred equities

(dividends)

HIP Preferreds Portfolio

Equities

HIP 100 Portfolio

Impact-weighted strategies (Earth 2x)

International and

Emerging

Cleantech ETFs

HIP Global Sustain’y 100

Global portfolios

Venture Capital and

Private Equity

Sustainability funds

Education and Human

Capital funds

Alternatives

Sustainable Forestry

Organic Agriculture

Renewable Fuels


Equities

Hedges

VC+PE

Real Estate +

MLPs

Fixed Income

Cash Which Asset Classes

Generate the

Highest IMPACT?Real

Assets


Which Asset Classes

Generate the

Highest IMPACT?

Equities

Hedges

VC+PE

Real Estate +

MLPs

Fixed Income

Cash

RealAssets


IMPACT and PERFORMANCE REPORT SNAPSHOT (Sample)


75

With HIP Scores, Your Portfolio Can Move to More Impact

1. Score Your

Current

Portfolio

2. Select

“more HIP”

Investments

3. Reallocate

to increase

portfolio’s

HIP Score


In this Portfolio, HIP Scores Can Vary by Asset Class,With a Wide Range of Human Impact + Profit


All Types of Investors Can Benefitfrom a HIP-Weighted Portfolio

HIP Portfolio

Individual Investors

Family Offices

Endowments

Retirement Plans

Pensions

Corporate Treasuries

Foundations


HIP serves

families,

family offices,

foundations

& teams with

advisors



Source:

Becker College

(DRAFT)

Endowment Seeking Impact,Income and Risk-Adjusted Return

CONFIDENTIAL © 2006-2012 HIP Investor Inc. 79Source: Becker College (DRAFT)

Portfolios Can Align With Mission + Deliver Impact


ENDOWMENTS: Long Term (200 year)and Can Be Local (Students, Alums, Geography)


Increasing Choices for Impact Across Asset Classes(Sample choices; NOT recommendations)

A More HIP Portfolio

Cash

Eco-focused banks

Economic empower-

ment credit unions

Fixed income

Muni Bonds

Microfinance

Mezzanine Debt Funds

Income Generating

Appreciation

REITs

Preferred equities

(dividends)

HIP Preferreds Portfolio

Equities

HIP 100 Portfolio

Impact-weighted strategies (Earth 2x)

International and

Emerging

Cleantech ETFs

HIP Global Sustain’y 100

HIP Global portfolios

Venture Capital and

Private Equity

Sustainability funds

Health and Wellness

funds

Alternatives

Sustainable Forestry


These Knowable Metrics of Future Risk are Frequently Ignored by Investment Managers

CONFIDENTIAL © 2006-2013 HIP Investor Inc. 83Source: Mercer ratings

Fixed Income Managers Have Been Slow to Adopt


INVEST LOCAL: SF Bay Area Impact Investing Initiative

www.baiii.org

• Equity funds

• Bond funds

• Real Estate funds

• Private Equity, VC funds

• Infrastructure funds

• Employment, eco/social/gov factors, transparency

• Affordable housing, transit, community + micro loans

• Sustainable building, redevelopment, remediation

• Job creation, urban development, innovation

• Transit, water, schools, hospitals, communications

Source: Bay Area Impact Investing Initiative

(baiii.org)

SUSTAINABLE BANKS: More Loans, More Deposits


Source: Global Alliance for Banking on

Values (gabv.org)

HIP Impact Ratings for50 States + DC & PR

CONFIDENTIAL © 2006-2015 HIP Investor Inc. Source: HIP Investor ratings of States

HIP Ratings Cover 2000+ Government Muni Bonds

50 States+ DC & PR

1081

CUSIPs

94 Countiescovering

307

CUSIPs

143 Citiescovering

719

CUSIPs

11 Joint Authorities with 45 CUSIPs

CONFIDENTIAL © 2006-2015 HIP Investor Inc. Source: HIP Investor analysis & ratings

HIP Impact Rating EXPLAINEDCity of Seattle = 70%

15 of 25 WEALTH points

•Median Income•Affordability of

Housing•Vacant Houses•Unemployment

•Poverty

21 of 25 HEALTH points:

• Obesity/Diabetes• Crime Rate

• Graduation Rate• Health Insurance

Coverage

75%15 of 25

EQUALITY points:

• Gender Diversity & Ethnicity Reflected

in Business Ownership

WEALTH25%

EQUALITY25%EARTH

25%

HEALTH25%

70%

19 of 25 EARTH points:

• Commuting Method &

Time Duration

CONFIDENTIAL © 2006-2015 HIP Investor Inc. Source: HIP Investor ratings

A Tale of Six Cities: Comparing the Impact (HIP Ratings) of Some of America’s Most Notable Cities

City of

Seattle

WA

City of

New York

NY

City of

Chicago

IL

City of

Los

Angeles

CA

City of

Detroit

MI

City of

Dallas

TX

Population 608,660 8,244,910 2,707,123 3,819,702 706,640 1,223,229

HIP

Rating70% 49% 44% 40% 38% 36%

HEALTH

of 25%21% 12% 8% 9% 1% 5%

WEALTH

of 25%15% 11% 7% 8% 6% 10%

EARTH

of 25%19% 13% 13% 12% 13% 12%

EQUALITY

of 25%15% 13% 16% 11% 18% 9%

BOND

RATING of

recent issue

S&P: AAA

Fitch: AA+

S&P: AA

Fitch: AA

S&P: AA-

Fitch: AA-

S&P: AA-

Fitch: AA-

S&P: C

Fitch: n/a

Moody’s: B1

S&P: AA+

Fitch: n/a

Moody’s: Aa1

Source: HIP Investor ratings and analysis; UTGO CONFIDENTIAL © 2006-2015 HIP Investor Inc.

How HIP:City of Baltimore, and Maryland Counties


HIP HEALTH PILLAR HIP WEALTH HIP EQUALITY

St County MetroArea

Overall

HIP Rating

Diabetes

Rate

Adult

Obesity

Rate

Violent

Crime

Rate

Murder

Rate

Grad

Rate High

School

Grad

Rate

College

% Living

in Poverty

Occupied

(not vacant)

Housing

Women

Ow ned

Businesses

African

American

Population

African

American

Ow ned

Businesses

MD County of Anne Arundel Baltimore 58.3% 8% 28% 561 3.5 91% 37% 6% 93% 31% 15% 9%

MD County of Baltimore Baltimore 54.1% 9% 27% 538 2.5 90% 35% 10% 92% 31% 26% 17%

MD County of Carroll Baltimore 57.4% 8% 28% 207 2.4 91% 32% 6% 96% 27% 3% 2%

MD County of How ard Baltimore 61.7% 8% 25% 577 - 95% 60% 4% 96% 30% 17% 15%

MD County of Montgomery Baltimore 57.9% 8% 25% 193 2.1 92% 57% 7% 95% 26% 17% 3%

MD County of Prince George Baltimore 53.5% 11% 34% 708 10.5 85% 30% 9% 92% 38% 63% 55%

MD County of Frederick Baltimore 62.2% 8% 27% 312 1.3 92% 38% 6% 95% 31% 8% 6%

MD County of Harford Baltimore 58.6% 9% 30% 347 2.5 92% 33% 7% 94% 34% 13% 9%

MD City of Baltimore Baltimore 44.7% 12% 32% 1,405 34.9 80% 27% 24% 82% 37% 63% 35%

US USA Average National * 8% 27% 405 4.8 86% 29% 16% 87% 29% 13% 7%

* The median of HIP Ratings calculated for Cities is 52.8%, for Counties is 53.5%, and for States is 49.5%; HIP Ratings cover more than 350 cities, counties and states.

HIP Ratings are comprised of the Pillars of Health, Wealth, Earth, Equality and Trust. Selected pillars and metrics are show n above.

Each column is color-coded: GREEN for leaders in ratios, YELLOW for average ratios, RED for laggards in ratios

Source: HIP Investor ratings and analysis

Leading & Laggard Munis: STATE HOUSING AGENCIES

CONFIDENTIAL © 2006-2015 HIP Investor Inc.

91

22%

46th of 50 states

poor disclosure on key metrics

29%

65%

18th of 50 states

use 3rd party green building certification

68%

METRIC

% loan recipients that are low income

Earth:

Green Building, Energy Efficiency &

Resource Conservation

Highlight

Yield to Maturity (12-31-14)

Credit Rating (S&P)

Maturity Year

HIP Rating

3.28%

AAA

2025

3.29%

AA

2026

Source: HIP Investor ratings, analysis and research

Leading & Laggard Munis: K-12 SCHOOL DISTRICTS


68%

67%16% & 20%

53%

52% 91%

87%58% & 66%

62%

76%

METRIC

Graduation RateNational Average: 85.9%

Averaged Math & Reading Score

Free & Free/Reduced Lunches

% of Budget Spent

on Instructional Expenses


Credit Rating (Moody’s)

Maturity Year

HIP Rating

1.82%

AA12021

1.89%

AA1

2022

Oregon South Carolina

*10% Low Income*26% Low Income


Leading & Laggard Munis: K-12 SCHOOL DISTRICTS


77%

79%16% & 20%

62%

36% students Asian & Hispanic w/ no representation on Board

60% 91%

87%31% & 36%

62%

well above SC averages for college readiness & math

76%

METRIC

Graduation RateNational Average: 85.9%

Averaged Math & Reading Score

Free & Free/Reduced Lunches

% of Budget Spent

on Instructional Expenses

Highlight


Credit Rating (Moody’s)

Maturity Year

HIP Rating

1.80%

AA12021

1.89%

AA1

2022

Oregon South Carolina

*10% Low Income*13% Low Income


Leading & Laggard Munis: STATE GOVERNMENTS

CONFIDENTIAL © 2006-2015 HIP Investor Inc.94

85%27%

18%

12%

few ethnic & female business owners

high rate obesity, diabetes

39% 89%39%

12%9%

#1 health insurance cov.

high usage of publictransport for commute

57%

METRIC

Education:

% Students Graduate High School

% Students Graduate College

Wealth:

% in Poverty

Unemployment Rate

Highlights


Credit Rating (S&P)

Maturity Year

HIP Rating

1.06%

AA

2018

2.10%

AA+

2022

North Carolina Massachusetts

Source: HIP Investor ratings,

analysis and research

Leading & Laggard Munis: CITY GOVERNMENTS


80%34%

21%11%

3rd highest cancer risk from airborne chemicals in all US

counties (2002)

47% 86%52%

12%8%

#1 city in US for sustainable waste disposal

58%

METRIC

Education:

% Students Graduate High School

% Students Graduate College

Wealth:

% in Poverty

Unemployment Rate

Highlights

Yield to Maturity (year end)

Credit Rating (S&P)

Maturity Year

HIP Rating

4.7%

AA

2012

8.5%

AA+

2013

NEW YORK SAN FRANCISCO



•sample investments (not recommendations)•In portfolio or diligence

•Accessible

offerings

angel investments

•Accredited

cash fixed income equity

public private public private

SRI/ESG/activism

Source: Pacific Alliance Group

HIP Portfolios Seek Impact + ProfitAcross Multiple Asset Classes


Asset Class HIP Portfolio Goal

U.S.-based equity HIP 100 Portfolio Since 2009, seeks equity exposure + higher impact than S&P 100 benchmark

Income-Generatingappreciation:

Preferred Stocks

HIP Preferred Stock Portfolio Since Q4-2011, seeks dividend yield + higher impact than preferred-stock benchmark

Income-Generating appreciation:

Real Estate

HIP Sustainable Real Estate Since Q1-2012, seeks income yield + higher impact than real-estate REIT benchmark

International Equity HIP Global: Dividends Since 2013, seeks income yield + higher impact than global equities benchmark

Fixed Income HIP+SNW Bond Portfolio Since 2013, seeks potential tax-deferred yield + quantified impact of muni bonds & corporate bonds



HIP Is Frequently Profiled in the Mediaand Authors Insightful Features


Top media recognize HIP for its innovative leadership…

and HIP authors features for leading journals and media

HIP Scorecard, 2007“Oil”, 2008HIP Faceoffs, 2010

Twice-monthly features, 2011

“Socially Responsible Investing 2.0 “(2011)

“Green Investing Strategies Growing” (2010)

“How ‘Nice’ Beats ‘Vice’ Investing” (2011)

Newsweek’s Green Rankings include HIP Ratings of Green Revenue


The 2015 Newsweek Green Rankings

The HIP Portfolio Manager: Multi-Disciplinary Experience

• R. Paul Herman, Chief Investment Officer, CEO + Founder of HIP Investor, Portfolio Manager of HIP Portfolios (Series 65 investment adviser)

– Wharton School, Univ. of Pennsylvania, specializing in finance.

– McKinsey & Co. advisor to Fortune 500 firms.

– Investment strategist for eBay founder Pierre Omidyar’s impact investing firm.

– Chief Development Officer for Ashoka.org.

– Investment Committee and Limited Partner, Patient Capital fund.

– Founder of e-finance firm pioneering 1st online debit card for families; grew to 30,000 customers and 55 partners in three years.

– Co-built $30 million energy practice, and $1 million analyst-program profit center at CSC Index.


How HIP Helps Investors


1. HIP RATINGS:Research, analyze & score

4500 corporate equities & bonds,

and 9000+ munis/treasuries/agencies

…on Future Risk & Upside Potential,

and Net Impact on Society

2. HIP STRATEGIES:Manage HIP-weighted investment indexes + portfolios

3. HIP PORTFOLIOS + 401(k)s:License HIP Ratings to fund managers,

wealth advisors, and 401k’s

HIP textbook in

22 university &

MBA curricula

Contact HIP

R. Paul Herman CEO + Founder [email protected]+1.415.902.7741Twitter: @HIPinvestor


mailto:[email protected]

business book bestseller list 22 university curricula: mba ... · published 2010 (john wiley &...

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