Some recent great reads
1) Willy Foote's article on agricultural finance, How To Help 450 Million Poor Farmers--Without Destroying The Earth
2) WEF's report on mainstreaming impact investments: From the Margins to the Mainstream
3) Morgan Stanley's commitment to Investing with Impact platform, 5 year target 10bn USD of client assets
November was a month of conferences with TBLI, EVPA and Lugano Fund Forum. The first two are very much focused on impact but LFF is a more conventional Fund Forum for accredited investors and wealth managers in Ticino and Italy. It was therefore great to see that they incorporated a panel for Impact Investments where I had the opportunity to give a presentation introducing this topic "Managing Wealth for Impact and Profits"
Microrate's "The State of Microfinance Investments 2013" is out. This 8th annual survey covers 92 active microfinance investment vehicles representing $8.1bn in assets under management. Key findings:
- total asset growth +17%, microfinance portfolio +18%.(source Microrate)
-Liquidity declined to 8.2% of total assets, down from a high of 14.6% in 2009.
-Growth in all regions, with Latin America (24%) and East Asia/Pacific (23%) posting the strongest growth, and moderate growth in South Asia (12%), Africa (12%), and Europe/Central Asia (10%).
-Azerbaijan (45%), Georgia (78%), Mongolia (38%), and Bosnia (43%) were among the fastest-growing countries.
-Funds continue to mature, with investors redeeming $438 million in 2012.
-MIV sector continuing to deconsolidate, with largest MIVs continuing to lose market share. Similar trend among fund managers.
-Equity investment grew by $77 million, but declined as a share of the portfolio from 20% to 18%.
-Institutional investors continue to dominate, with 56% share of total investment.
Last night Bunker Roy, founder of Barefoot College was one of the 7 recipients of the prestigious Clinton Global Citizen Awards. . The awards were presented at the Clinton Global Initiative Annual Meeting in New York,
..the honorees are chosen based on their innovative and effective approaches to making positive global change, and on their work’s potential for scalable growth and sustainability. They are leaders whose efforts transcend borders, change lives, and set an example for us all...( source: Clinton Global Initiative)
SOCAP 13 (Social Capital Markets, at the intersection of money and meaning) conference took place last week. I could not attend this year but it is great that the videos have already been made available on their website. A platform launched during this conference is ImpactSpace, an open data and resources platform. Their mission is to accelerate impact investing by making information available about the impact market (companies, investors, deals, people) to everyone and maintainable by anyone. It looks already a very helpful and promising resource.
Regarding recent articles and reports in this field that are highly recommended to read are;
1) "When can impact investing create real impact?" by Paul Brest and Kelly Born that appeared in the Stanford Social Innovation Review. The article and the responses by industry experts give a great insight on this topic.
2) "Making Impact Investible" by Max Martin of Impact Economy is a solid and rich working paper that provides a clear framework to understand the industry, all actors and also provides recommendations on how to scale up the industry.
Just back from the "Partnering for Global Impact" a two day forum by EBD Group in Lugano. Key areas covered were agriculture, education, healthcare housing, financial services and water.This forum facilitates outcomes in impact investing and philanthropy through one to one meetings alongside great keynote addresses (such as Sir Ronald Cohen) and panel discussions. It was a well organized event with very good content and great for networking.
Having attended numerous events on impact investment and philanthropy and having been fortunate to learn from outstanding social enterprises over the past 10 years I believe that one new topic should be added to these events.
These great forums such as Skoll World Forum, SOCAP, TBLI and PGI are playing a critical role in helping to solve the most serious problems we face through bringing together ideas, people, capital and promoting the more efficient use of resources. Find sustainable solutions which are working in emerging economies and scaling it. Funding and capacity building to be provided by impact investors, philanthropists and development finance institutions. It's great but maybe we could do even better.
One different angle should be added. What could WE in the developed world learn and import from the emerging market innovative models that have been successful? Who has developed or is developing low cost high quality services in education, financial services and healthcare? There are successful education models developed in Latin America that could be used for low income communities in the USA. Perhaps vocational school systems or microfranchising business models that could be useful in reducing youth unemployment in The European Union? The increasing applications of mobile technology for payment systems in Kenya? There is so much innovation happening in emerging economies and we should be pragmatic and maybe a bit humble and change our mindsets to search and learn from the best available solution.
I talked about this idea to some veterans in this field, Suzanne Biegel from Catalyst at Large and ClearlySo, Jed Emerson of ImpactAssets and Blended Value and to Hans Wahl of INSEAD and they all thought it made sense! This topic is worthwhile to dig in further and much more research is needed I hope it will be included in future forums.
UK Prime Minister David Cameron announced the launch of the Social Stock Exchange (SSE), a tax break consultation for social investors and £250m to help communities buy and support local businesses at the Social Impact Investment Conference on June 6th ahead of the G8 summit. The G8 leaders are embracing the promise of impact investments. The U.S. Small Business Administration is nearly doubling the amount it will put into impact investment funds, to $150 million from $80 million. An open letter from the industry which was published in last weekend's Financial Times, applauded the PM and the G8 leaders "for their proactive step to embrace the promise of impact investing as an important complement to exsisting efforts by the public and non-profit sectors". The open letter was signed by over 90 leading voices from finance and civil society – including JP Morgan, Deutsche Bank, Morgan Stanley, Credit Suisse, Goldman Sachs, Big Society Capital, KPMG, responsAbility, the Ford and Rockefeller Foundations and the Omidyar Network. Another step towards mainstreaming impact investments!
For anyone who would like to learn about Microfinance this is a great online tool. I took this distance learning course back in 2003 and it was great but now it is interactive and it is free. A thanks to Camelia Hrab for sending me this info. UNDP Microfinance Distance Learning Course