A slew of Impact stories today and also a discussion of Social Stock Exchanges – which is close to my own core speciality in the world of markets (I also publish the daily benchmark newsletter on Exchanges Exchange Invest).
Give Impact Investing Time And Space To Develop
Sasha Dichter – Harvard Business Review
Impact investing has captured the world’s imagination. Just six years after the Rockefeller Foundation coined the term, the sector is booming. An estimated 250 funds are actively raising capital in a market that the Global Impact Investing Network estimates at $25 billion.
Giving Pledge members described impact investing as the “hottest topic” at their May 2012 meeting, and Prime Minister David Cameron extolled the potential of the sector at the most recent G8 summit.
Sir Ronald Cohen and HBS Professor William A. Sahlman describe impact investing as the new venture capital, implying that it will, in the next 5 to 10 years, make its way into mainstream financial portfolios, unlocking billions or trillions of dollars in new capital.
Dick Parsons And Ronald Lauder Bring Impact Investing To Sub-Saharan Africa
Shawn Tully – Fortune
Dick Parsons asserts that the field of ‘impact investing,” putting money into ventures that promote the good of society, doesn’t live up to its name. For the former CEO of Time Warner (parent company of Fortune) and chairman of Citigroup, the folks behind that noble-sounding pursuit either simply seek big returns, generating no “impact” on jobs, healthcare or education. Or, they furnish aid under the guise of investing — so they’re really just giving money away. “We’re creating a new definition of ‘impact investing,'” asserts Parsons. “We want a return, but we won’t ignore entities where the return may not be the highest. Then we put on a second filter, assessing what the entity does for the benefit of mankind in Africa.”
If the investments bridge both criteria, says Parsons, “the model will get bigger and bigger and bigger.”
It sounds like a lofty ambition — maybe too lofty. But Parsons is already helping to fund an array of highly creative ventures in a part of the world that’s as bereft of venture capital as its soil is parched, the villages of sub-Saharan Africa. Parson’s partner is Ronald Lauder, the scion of Estee Lauder who served as a top executive at the cosmetics colossus, and pursues big media investments in Eastern Europe. “Ronald and I have been pals for thirty-five years,” says Parsons, who served as personal attorney to his late mother, and is a director of the Estee Lauder Cos. (EL).
How To Make An Impact
Michael Short – Sydney Morning Herald
Money is power. It can finance change. It can make the world a better, fairer place. Where there is inequality, it can bring opportunity.
Many endlessly pursue wealth for its own sake, despite ample research that demonstrates one’s wellbeing and contentment is not augmented by accumulating wealth beyond a certain level. Yes, money can buy happiness. However, more and more money does not buy more and more happiness.
But there are also many people who seek to generate capital to enhance the wellbeing of others, and, in doing so, find meaning, purpose and joy beyond that delivered by luxury and baubles. Today’s guest in The Zone is one.
Durreen Shahnaz is seeking to financially engineer massive change in the Asia-Pacific region, home to 1.2 billion people in poverty, 70 per cent of the world’s hungry, 65 per cent of the world’s malnourished children and where 1 billion people do not have access to clean water.
Shahnaz has created the world’s first social stock exchange, Impact Investment Exchange (IIX), operated in co-operation with the Stock Exchange of Mauritius. IIX, chaired by Shahnaz, brings together two increasingly powerful forces for change – social enterprises and impact investing.
Are Social Stock Exchanges The Great Equalizer To Democratize Development Finance?
Pete Troilo – devex impact
This past June, the world was introduced to two social stock exchanges.
In London immediately ahead of the G-8 Summit, U.K. Prime Minister David Cameron announced the launching of the Social Stock Exchange designed to connect social impact businesses with investors looking to generate positive social or environmental change and return on their investment. Supported by the London Stock Exchange Group, the SSE already has 11 listed member companies.
“For years the London Stock Exchange has made London the home for private finance, today London can cement its place as the home for social finance too,” Cameron declared in his pre-summit remarks.
Around the same time, Impact Investment Exchange Asia or IIX announced its public trading platform for social enterprises, called Impact Exchange, which has been formed in partnership with the Stock Exchange of Mauritius.
The relationship with the Stock Exchange of Mauritius is strategic, according to IIX sources, and allows the exchange to expand its footprint into both Africa and Asia. The groups are anticipating the first issuance on Impact Exchange within the year.
Despite multiple launch postponements — and the difficulties of shifting the mindset of investors beyond profit alone — impact investing leaders said they believe these social stock exchanges are poised to both democratize development finance and make inclusive growth a reality in emerging economies.