This investment method is now being practised


across nearly every asset class, with 63% partaking in direct private investment, 57% in private equity funds, and 38% in venture capital. And while it is undoubtedly good that more


ethical care is being taken with where the money goes, some argue we are setting the bar too low for what can be considered an “impact investment”. Amit Bouri, chief executive of The Global


Impact Investing Network (GIIN), says divesting away from assets that can cause harm—like arms and nuclear, tobacco, and gambling—is not enough. “Investors have been thinking for decades


on how to get harmful things out of their portfolios,” Bouri says. “But [impact investing] is about proactively


investing in solutions. It is that much more intentional step about investing in things like climate change directly.” The term “impact investing” was first


coined in 2007, at a meeting convened by the Rockefeller Foundation, to describe investments made with the intention of generating both financial return and positive social and/or environmental consequences. The Rockefeller Foundation aims to build a more inclusive economy and was started in 1913 by then- Standard Oil owner John D Rockefeller, along with his son John D Rockefeller Jr. There are no conclusive statistics to measure


the size of the global impact investing market. The closest is GIIN’s 2017 Annual Impact Investor Survey that indicates there is about $114 billion in impact assets globally. The survey is based on analysis of the activities of 209 impact organisations, including funds, foundations, banks, development finance institutions, family offices, and pension funds. Family offices made up just 3%, or $3.42 billion, of the GIIN sample. Bouri describes family offices as having played


a “leading role” in shaping the sector, despite the small number now involved. “In family offices there is a very small distance


between the owners and the asset… [So] in many cases family offices are blazing the trail. That said, the opportunity for family offices is largely untapped—there are many that are only now getting involved.” The latest piece of research by GIIN, Evidence on the Financial Performance of Impact


PHOTOGRAPHY: PRESS ASSOCIATION


impact investing is about proactively investing in solutions. It is that much more intentional step about investing in things like climate change directly


Investments, sets out to prove market-rate returns can be achieved through impact investments. The study found that by using top quartile impact funds, investors could achieve returns similar to conventional markets. However, the report also showed many impact


investors are willing to accept a financial trade off: 18% of private equity impact investors, and 61% of impact-motivated debt-issuers were willing to accept below market returns. Greg Neichin, a director from single family


office Ceniarth, which has offices in London, New York and San Francisco, questions whether investments which generate market-rate returns can really be considered impact investments. Ceniarth works in conjunction with the Isenberg Family Charitable Foundation—a family foundation formed by serial entrepreneur and ex-Nabors chief executive and chairman Eugene Isenberg and his wife Ronnie Isenberg. Neichin says while it is positive to see more


family offices incorporating their values into their investing activity, the definition of impact investing is becoming so broad that it is “nearly uninterpretable”. “I think our frustration comes from the lack of


clarity that has accompanied the mainstreaming of impact investing,” Neichin says. He says while there are many social and


environmental challenges can earn investors market-rate returns, such as climate or healthcare, true impact investing needs to go further, and usually requires return sacrifices and a high risk appetite.


Above: Former US President Barack Obama (left), Melinda Gates (centre) and Bill Gates (right) appear on stage during the Bill and Melinda Gates Foundation’s Goalkeepers 2017 at Jazz at Lincoln Center in New York


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