This first-ever conference held jointly by the Global Impact Investing Network (GIIN) and the City of London Corporation brought together more than 300 investment professionals from around the world on 10-11 October in London to discuss social and environmental impact investment. Asset owners, asset managers and other industry experts were invited to share diverse perspectives on impact investing in developed and emerging markets, industry trends and opportunities, and how best to address common challenges.
GIIN is increasingly becoming the global point of reference for impact investors and by coming to London this year it wanted to demonstrate its global ambition. I was impressed by the densely packed programme covering almost all aspects and types of impact investments, and bringing together the ‘who’s who’ of this emerging industry. As with popular parties, the organizers were able to announce that the conference was sold out and that a waiting list had been opened.
I found the title of the first session (‘The Impact Investing Ecosystem’) emblematic for GIIN’s effort to take an ‘ecosystem’ view and support its organic growth. The programme and its many breakout sessions covered a mix of industry trends, investment themes and technical matters, including topics such as viable food systems, social impact bonds, impact measurement practices and scaling social enterprises. I was impressed by the effort that organizers had made to include sessions for ‘beginners’ as well as for seasoned practitioners in the field, and to provide the views of different types of asset owner, including family offices, foundations and pension funds.
At times I found speakers and panellists too general in their remarks and too eager to avoid controversial discussions. Especially on the first day (probably all of us were ‘warming up’), I would have appreciated more openness in sharing the pitfalls and details of our investment strategies so that other investors could benefit. At times I sensed that below a surface of politeness there is increasing competition and confidentiality in the industry, which is not a bad sign per se.
Some of my personal takeaways were: the importance of ‘catalytic first loss capital’ for the further growth of the sector (GIIN has recently released a report on the issue), the need for impact fund managers to better understand the characteristics of the investors they target (in terms of asset allocation, risk-return profiles etc), the opportunities provided by intelligent ‘public-private-partnerships’ in areas such as development finance and infrastructure, the need for impact investors to better address important asset classes such as fixed income and property. Interesting was the active participation of large financial institutions such as JP Morgan, UBS, Goldman Sachs and AXA in the event, a sign that ‘mainstreaming’ is slowing taking place.
Coming from Switzerland, with leading asset managers in the microfinance and sustainable investment space but little engagement by the public sector, I was impressed by the support that impact investing receives from the UK government and the City of London. Nick Hurd, the UK Minister for Civil Society, gave a passionate speech at the conference (speaking freely, without notes) and announced the plan to introduce tax incentives for certain types of social investments in 2014. He underlined the need to develop a specialist impact investing industry, because ‘the mainstream financial sector barely interacts with the NPO sector’ and is therefore of little help. The catalytic role played in the UK by government-mandated institutions like Big Society Capital and the Green Investment Bank became apparent during the event. And it was the UK government that proposed establishing a G8 Social Impact Investment Taskforce led by Sir Ronald Cohen, a veteran of impact investing who explained the ambitious goals of the taskforce at the meeting.
The GIIN conference in London was an excellent opportunity to ‘feel the pulse’ of this growing industry. Considering that the term ‘impact investing’ was coined only six years ago, it is truly amazing to see how far the industry has come.
Ivo Knoepfel is founder and managing director of onValues, a Zurich-based investment consultancy supporting family offices, foundations and pension funds in integrating sustainable and impact investing strategies in their portfolios.