Impact investing is a term that had been thrown around in the financial world for quite some time. What does it really mean? Impact investing means investing to generate positive environmental or social return along with financial return.
I needed to understand better this new market and how it is growing, changing and establishing itself in the traditional investment world. Kevin Jones of Social Capital Markets and a partner at Good Fund was kind enough to spend a little time discussing some of the topics so that I could glean some insight into this investment style.
AP: What signs can you point to that show the trend is growing?
KJ: Many more new social venture funds are being started, in the U.S. and in Europe, many of them focusing on sub-Saharan Africa or India. Microfinance is expanding beyond just tiny loans to the poor into sectors like education, water and micro-insurance. The pioneers of social finance are maturing, coming up with sophisticated financial vehicles like bonds for renewal energy in the developing world, while major multi-billion dollar funds are moving to related areas like sustainable forestry in response to investor demand.
AP: What do you think is the potential within this category?
Memoirs of a Geisha movie full The Level download KJ: I think this category, using the market for both financial return and social and environmental impact, has the potential to complement philanthropy and government intervention as a potent force addressing global challenges at scale.
AP: Can you offer some examples of successful impact investors? Edison ipod Two Mules for Sister Sara movie
KJ: I think the Acumen Fund has been successful, as has New Schools Venture Fund, and New Profit. Good Capital has good results; Aureous in the UK, one of the oldest social venture funds has outstanding results as does Calvert Social Investment Foundation. Equilibrium Capital is doing amazing things up in Oregon.
AP: Who are the leaders in the space on the entrepreneur side?
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KJ: On the entrepreneur side I’d put Better World Books, New Leaf Paper, E&CO and Root Capital as the leaders.
AP: How does the recession impact this market?
KJ: Though everyone has less money, this sector has actually increased in relative strength, as I see it emerging. Investing and realizing what happens with your dollars, what your real impact is in the world makes more sense to more people now. With the spectacular collapse of a market totally focused on greed, impact investing is emerging as a strong new alternative.
AP: There are many specific funds that are religion oriented or based on the laws of Sharia that have mandates for what they can and cannot invest in. Does impact investing have a given mandate or is it more of a theme?
KJ: It does not have a mandate, though people sometimes have religious reasons for impact investing. Secularists do it, atheists who care do it. It is simply the combination of seeking both financial return as well as positive environmental and social impact from that investment.
AP: Would LOHAS (Lifestyle of Health and Sustainability) be considered impact investing?
KJ: No, LOHAS is about lifestyles, not about economic justice. Your yoga mat is not particularly socially conscious. As it evolves to think about more than the yuppie self-conscious consumer – and more toward the people who make the oils, the coffee, the crafts - LOHAS will touch on and can overlap with impact investing.
AP: Are there any Sovereign Wealth Funds currently deploying capital into impact investing?
KJ: Yes, there is one in Dubai called Legatum.
AP: Most importantly what is the main driver for this type of investment style - is it profit or social good?
KJ: It is a blend. Sometimes it can be impact leading with return trailing; sometimes it is return leading with impact trailing. It combines philanthropic elements and motivations with financial and investing rigor, due diligence and engagement with portfolio companies, etc. It is not binary. It’s a “category buster” at the highest level – a movement that’s clearly emerging as an asset class.
Some industries within the social investing category are LED lighting, organic/natural food companies, water treatment, sustainable energy. Impact investing really looks at how an investment into a company changes people’s lives specifically as it relates to helping poorer nations and their population achieve a higher quality of life. This can be through empowering citizens of that country to start small business, through micro finance solutions to enabling technologies that speed the process of business development.Scary Movie 3 download
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