Social Impact Bonds have wondrous potential. Social Impact Investing on the other hand still has to convince me it is not merely a fad verging towards a possible dogma…here’s some research from Blackrock:
Social Impact Insights From BlackRock
Impact investing is not a new concept. Though when pitched as a primary mandate for a new investment product from global investment management giant BlackRock, it is at once novel and pivotal. Wharton students lined the walls of the filled Huntsman classroom on Thursday, October 31 to understand how BlackRock employees Zaneta Clark and Robert Morris pitched the “BlackRock Impact” product to the Global Executive Committee at BlackRock.
Clark and Morris discussed the growing popularity of impact investing, that is, investment dollars that do more than just realize a financial return. “They labeled it as an emerging alternatives asset class, and we are the largest asset manager in the world. Should we be thinking about this?” said Clark.
A year later, after surveying their clients through BlackRock’s sales teams and researching the investment landscape, Clark and Morris presented their findings to the Global Executive Committee. This resulted in BlackRock Impact, with a team of 28 professionals across 21 functions and 6 regions to research the Impact Investing landscape. Clark and Morris further revealed that they were close to receiving their first mandate from a notable institutional investor.
In addition to explaining the space they identified, Clark and Morris also shared their experience of being social entrepreneurs within an established corporation. “We were initially hesitant on how our managers would react, but the firm [and senior leadership] appreciated the initiative we took,” said Morris.
Clark and Morris summarized their lessons-learned from navigating their large corporation—takeaways that fall into three categories. First, they found that junior ownership spurs junior creativity; second, when direct managers encourage exploration, things happen; and third, people find time to develop the project when it became a formal engagement.