How can investment advisers help foundations make sustainable and impact investments? There are great expectations that endowed foundations will act as the catalytic investors to ‘prime the pump’. In the hope that we could raise the profile of current practitioners and help to unlock far greater capital flows into the sector, Bridges Ventures asked me, as the first participant on their Bridges Fellowship Programme, to research the role of investment advisers in building the sustainable and impact investment market. Although my research included the broad spectrum of asset owners, this article focuses primarily on foundations.
As investors, foundations appear uniquely positioned to be ‘first movers’: they have access to high risk capital (grantmaking budgets) and large investment portfolios with long time horizons, and their fundamental purpose is to achieve a social or environmental mission.