Officials at Carlisle Social Investments, Kennewick, Wash., are trying to serve God the best way they know how - by being a money manager.
The company, formed in November 2000, is the first socially responsible manager of separately managed accounts to use the United States Conference of Catholic Bishops' guidelines on acceptable investments, said Jeff Petersen, vice president and chief executive officer. The company developed two indexes - Carlisle Catholic U.S. Market index and the Carlisle Catholic Small Cap index - that screen out all companies with ties to abortion, contraception, pornography, racial and sexual discrimination, tobacco, alcohol, predatory lending, military, genetically modified organisms and practices harmful to the environment.
Carlisle passively manages equities in separate accounts based on the indexes.
"We felt we needed to focus with one social teaching," Mr. Petersen said.
With a minimum investment of $1 million, Carlisle plans to attract institutional investors and high-net-worth clients. So far, the firm has one client, a Roman Catholic diocese in the western United States.
Mr. Petersen said he believes socially responsible investing can give investors the same returns as unrestricted investing. He pointed to a 2000 study conducted by Meir Statman, a Santa Clara University professor, which concluded that socially responsible mutual funds and indexes could produce rates of return similar to or above their unrestricted counterparts.
Mr. Statman's study also found socially responsible investing allowed investors to influence companies with their beliefs. Mr. Petersen said.
Currently, Carlisle only runs separate domestic equity accounts. However, Mr. Petersen said that when assets under management increase, Carlisle might add mutual funds and fixed-income and international equity strategies.
Mr. Petersen also is co-owner of the investment advisory firm Petersen Hastings Investment Management, also in Kennewick, which manages $170 million in equities for a client list of small retirement plans and individuals.