In March 2022, investors at venture capital firm QED consider strategy for establishing business in Africa.
Fernando Scodro, a third-generation member of his family, mulled over the next step in integrating an ESG strategy into his family office’s investment portfolio. While his family office, Grupo Baobá, had made excellent progress in incorporating his family’s values into their individually owned assets, such as VC and real estate, he weighed how to expand their ESG strategy in future investments. How should the family evaluate the relative benefits of an asset's return on investment versus return on impact? What would a forward-looking ESG strategy look like for his family – and other families who were their co-investment partners? How could Fernando convince external partners of his strategy’s imperative and cultivate likeminded managers and financial products to achieve his goals? Finally, when should the family instead prioritize achieving impact through philanthropic initiatives? However he chose, he knew that the paths he advocated for within his family would impact all future generations of the Grupo Baobá Family Office.
In the pandemic, financial inclusion icon BancoSol faces a government-mandated year-long deferral of all loan payments, followed by the sudden Covid death of its CEO. In a Bolivia mired in political turmoil following a failed presidential election, with clients not obligated to pay either interest or principal from March to the end of 2020, the bank faces a severe cash deficit. This is exacerbated by the regulatory determination that, as the deferrals are mandated, loans must be deemed current and performing and resulting profits continue subject to income taxes that must be paid. BancoSol management must decide how to respond to this crisis. When the mandated deferrals come to an end, the bank regulators issue instructions as to how the restructuring must take place. As the total deferred amounts add up to 85% of its loan portfolio, this is a critical matter for BancoSol. Prior to the regulatory instructions, management had painstakingly designed its own restructuring program. Convinced that it is the optimal way to proceed, management strongly recommends its implementation regardless of contradicting the regulatory instructions. The deteriorating financial condition of the bank adds urgency to the decision. In the midst of these issues, in February 2021, Covid suddenly claims the life of the bank’s longtime CEO, Kurt Koenigsfest, the architect of the modern BancoSol. With the bank’s very existence at stake, Esteban Altschul, the chair of the board of directors, must come to grips with how the restructuring of the deferred loans will take place and how the various management gaps exposed by Koenigsfest’s death will be filled. At the same time, convinced that the future leadership of BancoSol is linked to its adaptation to the digital age, Altschul must assess the efforts of the bank to-date in this area and how it should proceed in the future.
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Maria Fernanda Miguel is the Christopher P. Torto Executive Director for the Latin America Research Center (LARC). Her responsibilities include leading research activities for the LATAM region, and providing programmatic support to different areas of HBS including admissions, executive education, and immersion programs. Fernanda is based in Buenos Aires, Argentina.
Prior to joining Harvard Business School, Fernanda was a Senior Director and Leader for LATAM Business Development at Merck and senior consultant at McKinsey & Co., serving as global Practice Manager for the Business Technology Office Health Care Practice.
She holds a degree in economics from the Argentine Catholic University, an MBA from Harvard Business School, and a Master of Research from University of Bath.
Fernanda has been very active in non-profit activities, including fund rising at the Fundación Acción Hemato-oncologica – Argentine National Academy of Medicine, and acting as advisor to the Board of Directors of the Hospital Garrahan.