Adam Torres and Caitlin MacLean discuss Financial Innovations Labs.
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Financial Innovations Labs was created to promote financial solutions to overcome economic and social challenges. In this episode, Adam Torres and Caitlin MacLean, Senior Director of the Milken Institute Financial Innovations Labs, explore Financial Innovations Labs and how the labs have resulted in concrete outcomes.
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About Caitlin MacLean:
Caitlin MacLean is senior director of Financial Innovations Labs at the Milken Institute. She oversees the research, development, execution and follow-up of the Labs, which promote financial solutions to overcome economic and social challenges. During MacLean’s tenure at the Institute, the Labs have resulted in concrete outcomes, including the creation of new investment funds to support biomedical research and the implementation of government policies to facilitate the growth of the renewable energy sector. She is the co-author of many Lab reports and related journal articles. Prior to joining the Institute, MacLean worked in the for-profit sector developing marketing campaigns and communication strategies for Fortune 500 companies. She also worked in the nonprofit sector managing fundraising and program administration for arts development organizations. MacLean is a graduate of the New School University and has an M.B.A. in finance from the Anderson School of Management at the University of California, Los Angeles.
About Milken Institute
The Milken Institute is a nonprofit, nonpartisan think tank focused on accelerating measurable progress on the path to a meaningful life. With a focus on financial, physical, mental, and environmental health, we bring together the best ideas and innovative resourcing to develop blueprints for tackling some of our most critical global issues through the lens of what’s pressing now and what’s coming next.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and today we are at the Milkin Conference in Beverly Hills, California. I am so excited and pumped to have Caitlin McLean on the line. She is the Senior Director of Innovative Finance over at Milkin Institute.
Caitlin, welcome to the show. Good morning. Thanks for having me. All right, Caitlin. So we, we got a lot of ground to cover today. I, I’m excited to get into this. My, my first time at milking maybe six, seven years ago. Time flies. This is my second conference. I believe that you, you’ve got a couple more under your belt, right?
Seven. This is my 17th. Yes. Amazing. So I wanna, you know, I wanna go back in time a little bit and, and really get into the Milkin Institute, how you first discovered it, how you discovered some of what Milkens all about. And also, you know, when, when you joined the team and how, how that all took place. And of course we’re gonna talk about the financial labs, innovation, financial labs but before we do all that we’ll start this episode, the way that we start them all.
And what we start this with is what we call our mission matters minute. So our mission at Mission Matters is really to amplify stories, to tell stories for entrepreneurs, executives and experts. That’s our mission. Caitlin, what mission matters to you? So at the Financial Innovation labs, what we try to do is look at specific market failures or funding gaps around kind of big societal challenges.
And so for us, the mission is, is to try to solve problems and be able to provide resources and bring people together to kind of think through what some of those. Challenges are to, to actually kind of move solutions forward. So if you’re talking about climate change, if you’re talking about housing health what matters to us is actually being the people who can bring the experts together to say, here are the solutions.
Here are how you provide resources for those solutions. Let’s move them forward. Fantastic. Love bringing mission-based executives on the line to share why they do what they do, and really to bring that to our audience because I know some of our audience may not be familiar with Mi Milk and Institute.
So maybe let’s kind of start in the beginning, the origin story. So how did all this get started for you? Yeah, I was not familiar with the Milkin Institute either. So, you know, it’s interesting. I have a fairly unusual background, although I think that when you’re talking about kind of social impact, oftentimes people come from a wide variety of backgrounds.
But being a financial think tank, I had no expertise in finance. Actually, I came from musical theater. So amplifying stories is very important to me too. So I actually studied musical theater, wanted to you know, be on stage. I think I learned pretty quickly doing that and doing a whole host of jobs in New York City that the storytelling piece of it was important to me, but doing something a bit more meaningful mm-hmm.
Was also equally as important. And so, you know, thinking about what you can transition into. Yeah. I, and so then, you know, after that, Again, kind of corporate communications, oftentimes you’re like, Hmm, I’m not sure I’m having the impact. Mm-hmm. You know, kind of having the mission that I want to achieve through my career.
And so I transitioned found the Milken Institute and a job in the research department. We actually had only done a couple of financial innovation labs at that point. And you know, kind of worked my way up, went back to business school, studied finance. Wow. And have built out now the over, nearly a hundred.
Projects that we’ve done over the 16 years that I’ve been here. Wow, that’s amazing. And when I even see the, like, just the growth of the conference itself. Yes. So I can think about, again, six, seven years. The first time I attended and I, it was a little bit, it was still huge and it was still something that all of Beverly Hills stops for.
But now as I just. See it, it’s gotten bigger and bigger and bigger. The name, the the mission and also like some of the programming. Yeah. Let’s go further into the financial innovation lab. So maybe tell us a little bit more about your directive and, and your department. Yeah. And it’s interesting, I would just say about the conference when we because all of the projects that the, the financial innovation labs focus on are either environmental or social.
And so 16, 17 years ago, it was very difficult to get anyone at this conference to come to something that had environmental or social Right. Exactly. Couldn’t, couldn’t pay people to come into the rooms of the panels that I was putting together. So we’re very excited now to have such. Robust programming around sustainability.
But throughout the year we do these projects. And again, it’s, it’s trying to bring people together to say, here is an identifiable, kind of quantifiable funding gap. And so if that’s about new technologies for climate if that is looking at affordable housing for seniors, if that’s looking at, you know, trying to build out a life sciences fund in Southeast Asia, there are, you know, kind of challenges in terms of just putting together the modeling for the final.
Financing. Yeah. And so what we try to do is, is help build that out, kind of incubate it in the lab as we call it. Yeah. And so we, we look at a whole host of, of issues and hopefully at the end of it, come up with both kind of new ideas for those models, but also through the convenings, bring people together to form new relationships to move those forward.
Yeah. And so our, our background slightly juxtaposed. So I, I started in finance and I ended up in front of doing what I’m doing now. But I will like, get rid of this, get rid of this. Hold on. But here’s the funny part. I remember e S G in like early, early days, so we’re talking like late nineties. I don’t even know if that was the term we used at that point, but I remember it.
I remember this and it’s exactly what you said it was. It was hard to get somebody even to, to consider it, to think about it for significant investment or something that was just, you know, something on the side. But I feel like, and you’re, you’re much more an expert than this, than myself, but I feel like some of the, some of the changes that, you know, E S G and investing for sustainability and some of these other initiatives, I think corporate America and just corporations across, around, around the world are understanding that that can be good business.
Not just the right thing to do, but actually good business. Can you maybe speak a little bit on that? Yeah. I think we look at it two ways. So I think that there’s Kind of consumer base that is obviously increasingly interested in having products and services that are better for the world and for their communities.
And so I think companies have to respond to that. But I think it’s also a risk mitigation role. Right? So you’re also thinking about as we see, you know, the climate change and as we see more storms, severity of storms, you see. California getting rain. Yeah. When it normally doesn’t you know, you’re looking at wildfires, you’re looking at flooding around the United States and, and outside of the us.
I think people also just see the immediacy of, wow, we need to actually start changing alongside the, the change in our climate. And so I think that. People are understanding that there are environmental risks that are material to doing good business. So it’s not only just about having a positive impact, but also mitigating potentially the risk that you might have if you, you know, are susceptible to flooding or fire or things like that.
Yeah, and I know one of the things that Financial Innovations Labs is known for is actually doing things that get results. So we’re kind of, in my opinion, I, and nothing against anybody else that’s out there just. You know, writing white papers and all the other things that needs to happen, right? We need to educate the public like we need to.
As much as we think we have come as far as we think we’ve come, we got a long way to go. Still, a long, long way to go. So maybe talk a little bit about the, the, just some of the objectives or maybe some of the specifics that are, are being worked on. For sure. And you know, I think as, as much as think tanks, like to say we are action tanks.
Yeah. We do, we don’t manage, we actively manage of course funds. Right. Of course. So, but I think what we try to do through the lab process is, like I said, build those relationships so that the outcome does happen. Mm-hmm. Because we’re not going to actually execute the funds. But we work with partners who will.
So for example, we worked with a partner who was building a very large climate fund. Obviously because. There is significant interest but also significant need. And the question was, you know, how do you get investment earlier into kind of the technology space? Because earlier technologies are obviously riskier.
Yeah. Investors, especially institutional investors, are not necessarily willing to take on that sort of, Early stage risk before it’s commercialized and generating a significant amount of revenue. And so what we were working on this fund was trying to help them think about alternative ways to structure the capital so that they could take on more risk without necessarily sacrificing returns.
And so I think that’s, you know, kind of just one example, we’ve, we’ve worked with partners, for example, the treasurer of the state of Illinois to look at an education fund, an impact investing fund that was around $700 million. To support students who were interested in continuing their, you know, kind of college, but maybe had maxed out their loans or, you know, needed you know, kinda additional funding.
And so we helped think through the structure and you know, the the, you know, kind of where the funding goes, right? And it’s important to match the structure of the fund to what you’re paying for. So that’s what we like to focus on. All right. So 2023 milkin Conference. Kind of put you on the spot with this one.
What, what’s one, I know we’re only in on Tuesday. We still have some more, more day, another day ahead of us. What’s, what’s been one of your favorite moments so far? Okay. And I, and I wish I could say, I wish, I wish I could take credit for putting together this panel, but I did not. I would say yesterday I saw a panel with John Legend.
Wow. Which was looking at how folks who were previously incarcerated can have a second chance because obviously depending on the state that you’re in, but pretty much across the board when you are convicted or. Even just arrested the amount of barriers that start to come up because you have to check a box that says that you have a record obviously significantly limits what your kind of human potential is, your social potential and your economic potential is.
Yeah. And so he was talking a lot and his, his panelists talking a lot about some of the initiatives to have more of a clean slate. Mm-hmm. And I think it goes to this idea of, Kind of social sustainability, right? Because we’re talking about certainly giving people a second chance because it’s the right thing to do, but it’s also economically better for them, right?
Because you need, as John Legend says on the panel, encourage everyone to watch. You know, if you’re not giving people access to the workforce, they’ll find. Financial means another way. Yeah. Which is usually not the way we want them to go. Yeah. And so I think that you know, kind of having that economic productivity argument is sometimes not exactly the argument that people make.
And, and it’s unfortunate because it has both a social good and a, an economic good. Yeah. And also it’s John Legend, so you should definitely watch it. Yeah, well, well that of course. Yeah. So I noticed that, and I’ve, and I’ve seen this throughout the years. I think I, off the top of my head, I think Will, I, am was one of the panelists when I, the, the time I came years ago.
Yeah. And one of the things that I’ve done and why, why Mission Matters is, is attending, is that I want more people to know about Milk and Institute. I just feel that there’s so many, and, and I love when somebody like a John Legend or will, I am like these larger celebrities. Do come to conferences like this to show, you know, responsibility number one but also to, to, so that a broader audience can understand the content, see what’s happening, and just understand that there is some, you know, real good going there.
They can be part of. So that being said, can you maybe talk about the, the Milkin platform just as a whole, and maybe how those out there that wanna learn more, they wanna get involved, or this is maybe the first time they’ve, they’re ever hearing of it, is listening to this podcast or watching it on YouTube.
Like, like how do people get involved? Yeah, I think it’s, so the Milk and Institute has such a broad mission in terms of looking at areas that, you know, advance people to have, you know, kind of live a fulfilled life, right? And so obviously that’s very broad, but we look at finance, health, and philanthropy.
And there’s so much that falls under that. And I think each person has, is driven by a mission that can be unique to them. And so whether it’s because they wanna fight cancer, Or they care about education or they wanna fight climate change. There’s so much that we do at the Milk and Institute that I think people can connect with.
And part of the great, you know, kind of milk and institute secret sauce is this convening power. And so I think the ability to bring people together from the investment community, the, you know, public sector, government, philanthropy, corporations, If you’re interested in collaboration, in partnership, this is a perfect place for you to be in terms of meeting the right people, because we all share similar mission to, you know, kind of change the world for, you know, in a positive way.
And I think that depending on what your particular personal mission is, there’s so much to, to offer in terms of finding partners and, and finding content that help can help educate you and, and how to move forward. And speaking of content, if somebody wants to read more and follow the content of financial innovation labs, like what’s the best way for them to do that?
Yes, our website. On our website you can, you can navigate to the Financial Innovation lab page where we have all of our content. Again, not meant to just be white papers we’re very conscious of that, but it also shares stories of some of the outcomes. You know, different testimonials from folks who have.
Participated to show what the, the actual outputs and outcomes are. So I’m really excited for folks to, to go there and see all the great work we’re doing. Fantastic. And and we’ll definitely put all that information into our end of the show notes and all that good stuff. Cause we definitely want more and more people to know about financial innovation labs.
Well, Caitlin just wanna say hey, really appreciate you taking some time outta your busy conference schedule to come on the show today. It’s been a pleasure and I’m sure we’ll be doing this again in the future. So thanks again for coming on the shop. Thanks for having me.