At the end of 2024, Align Impact raised $1.5 million in financing; by the middle of last year, one of the earliest purpose-built impact advisory firms was almost out of money.
Denver-based Align will shut down as of April 30.
“It’s incredibly disappointing to have joined a firm like Align and to have discovered that the underlying business was not sustainable,” said Align’s Matthew Weatherley-White, a cofounder of Caprock Group. Weatherley-White joined Align in 2023 and became CEO last year when Align’s founder, Jennifer Kenning, stepped down. The firm has been unable to raise additional capital to grow the business toward profitability, he told ImpactAlpha.
“We made the difficult decision to wind down operations and crystallize as much shareholder value as possible through the sale of different parts of the business.”
Wind down
About 50 Align customers have scrambled to find new advisors for their impact portfolios. Weatherley-White said Align will maintain a small staff through June to help clients with administrative details. In addition, the portfolio management platform Addepar has agreed to maintain Align’s client data.
Weatherley-White and Jack Meyercord, along with four other members of the Align team, will join Sorenson Impact Advisory, part of the Sorenson Impact Group, which will also gain some Align clients (disclosure: Sorenson Impact Foundation is an investor in ImpactAlpha).
“This is not a new beginning – it is the moment everything we have each built starts compounding collectively,” said Sorenson’s Lauren Sercu.
Align had about $715 million in assets under management, according to its latest SEC filing. Of that, about $523 million came from high net worth individuals. Sorenson Impact Advisory manages approximately $255 million in assets, according to its filing.
Sub-scale
In addition to its advisory business, Align Impact provided impact investment deal sourcing for other registered investment advisors. It also managed three funds-of-funds across broad impact themes and offered bespoke consulting services. Such services can become profitable at scale, but with its limited asset base, Align was unable to generate business synergies.
“Impact investing has always suffered from a double standard. We’ve had to live up to both financial performance and impact standards. Whenever one falters, the market is quick to point out that impact is a failed discipline,” Weatherley-White said in an interview.
“I fear that people will look at the failure of Align and conclude that one cannot build an investment firm that focuses on impact investing. I can say unambiguously that the failure of Align has nothing do with our impact investing focus.”