Bridges Ventures and The Parthenon Group launch an Investors’ Guide to Impact Investment

25th March 2010

Bridges Ventures and The Parthenon Group have published a ground-breaking new report looking at investments that can make a positive social or environmental impact as well as financial returns.  The report is intended to help the investment community gain a better understanding of the growing Impact Investment industry. An evening event, kindly hosted by J.P. […]

Bridges Ventures and The Parthenon Group have published a ground-breaking new report looking at investments that can make a positive social or environmental impact as well as financial returns.  The report is intended to help the investment community gain a better understanding of the growing Impact Investment industry.

An evening event, kindly hosted by J.P. Morgan, was held in London yesterday to share the report with the investment community and over 120 people attended. Nick O’Donohoe, Global Head of Research at J.P. Morgan welcomed the attendees, followed by David Blood, Founder of Generation Investment Management who set the scene by talking about the importance of Impact Investment.

Co-authors of the report, Michele Giddens of Bridges Ventures and Tracy Palandjian of The Parthenon Group presented the main findings of the report and this was then followed by a panel of Impact Investment fund managers chaired by Amit Bouri of the Global Impact Investing Network.

Impact Investment, also often termed social investment, means “actively placing capital in businesses and funds that generate social and/or environmental good and a range of returns, from return of capital through to above market returns, to the investor.”

The Bridges Ventures/Parthenon report, entitled Investing for Impact: Case Studies Across Asset Classes, is based on interviews with over 50 pioneers in this increasingly vibrant space. Over the last decade, argue the authors, there has been rising interest within the investment community in making sustainable investments. The challenging current economic conditions combined with the threat of climate change render impact investment more important than ever. Plummeting endowments and the shrinking budgets of non-profit organizations and governments mean that whilst social needs are continuing to grow there is less capital available through traditional sources to address them. Mobilizing the capital markets to help solve deep seated social and environmental challenges on a large scale is key to creating a more sustainable form of market capitalism, over the long-term.

To bring greater understanding of the Impact Investment sector, the report presents a system for cataloguing investment opportunities using the traditional asset allocation model familiar to the investment community. Over 30 case studies have been documented in detail to illustrate the diversity of opportunities by asset class, risk and investor motivation.

The report has three main conclusions. First, Impact Investment is a growing phenomenon globally.  Second, many funds have delivered superior market-rate or above financial returns, and are now raising capital from institutions such as pension funds and financial institutions, as demonstrated by investments for example in the microfinance, global health, sustainable forestry and cleantech areas. Long seen as an investment sector only for the philanthropic investor, the solid returns the sector is producing is changing this landscape.  Third the sector is moving beyond the quoted asset class in which Socially Responsible Investment (SRI) has its roots.  Whether through sustainable forestry, or cash lending to community development banks, investors have more choice than ever to diversify their portfolios through Impact Investments.  There are impact investment funds developing across a wide range of asset classes that provide investors with numerous options to trade off between risk, return and level of impact.

In her introduction to the report, Judith Rodin, President of the Rockefeller Foundation, says:

“Government Funding, international aid and philanthropic donations alone are insufficient to achieve the world’s development aspirations.  The emerging Impact Investing industry enables investors to direct their resources toward multiple bottom-line returns – financial and social or environmental.  This seminal scholarship lays the groundwork for new and clearer understandings of the industry.”

David Blood, Senior Partner of Generation Investment Management adds:

“Whether you are a private individual, family office, investment bank, foundation endowment, or pension fund, this report should be helpful in providing a view across asset classes to highlight the variety of opportunities and ways to invest for impact.”

Michele Giddens, Executive Director of Bridges Ventures, commented:

“We hope this report shows the Impact Investment sector is increasingly attractive to a range of investors and can generate solid financial returns, as well as social and environmental good. By accumulating the knowledge of pioneers in Impact Investment in a format familiar to the wider investment community, we hope the report will be a valuable resource for future investors who may or may not have any prior knowledge of the space.”

Tracy Palandjian, Managing Director of The Parthenon Group, commented:

“This report advances the field in two ways: it organizes Impact Investment opportunities within an asset allocation framework that is resonant with traditional investors and it offers detailed case studies articulating metrics on both financial returns and social impact.”

-ENDS-

About the report

Bridges Ventures originated the concept of the report with the goal of fostering greater understanding within the investment community of the opportunities offered by Impact Investment and to promote the flourishing of further investments that can make a difference as well as making financial return.  The Parthenon Group provided the leadership in researching and authoring the report and the work was conducted on a pro bono basis.  Bridges Ventures and The Parthenon Group also relied on support from The Rockefeller Foundation, Generation Investment Management, and the Global Impact Investing Network (GIIN) to help guide the research.

About Bridges Ventures

Bridges Ventures is an innovative investment company with a social mission whose commercial expertise is used to achieve attractive returns for investors as well as social or environmental aims. Bridges Ventures key backers include Sir Ronald Cohen, co-founder and former chairman of Apax Partners, 3i and Doughty Hanson.

The team pride themselves on working closely with the companies they back and are committed to helping entrepreneurs achieve long-term success. Bridges Ventures currently has two venture funds under management that invest in businesses based in regeneration areas and in sustainable business sectors such as the environment, education and healthcare.

They also recently launched the Bridges Social Entrepreneurs Fund, a quasi-equity fund for social enterprises and the Bridges Sustainable Property Fund, which invests in properties in regeneration areas and environmentally sustainable buildings.

For more information, please visit www.bridgesventures.com.

For media information please contact HB Communications on +44 (0)20 7637 2780 or Tom Hampson-Bellon  thb@hbcomms.com   Antonia Coad  a.coad@hbcomms.com

About The Parthenon Group

The Parthenon Group has taken the lead in researching and authoring this report.  The work has been done on a pro bono basis because the report has the potential to leverage more capital into investments that can produce great social and environmental benefits. Parthenon is a leading advisory firm focused on strategy consulting with offices in Boston, London, Mumbai, and San Francisco.

Since its inception in 1991, the firm has embraced a unique approach to strategic advisory services; long-term client relationships, a willingness to share risk with our clients, an entrepreneurial spirit, and customized insights are the hallmarks for which Parthenon has become recognized in the industry. This unique approach has established the firm as the strategic advisor of choice for CEOs and leaders of Global 1000 corporations, high-potential growth companies, private equity firms, healthcare organizations, and not for profit organizations. Our Non-Profit Practice assists non-profit leaders, foundations and grantees with strategy development, corporate social responsibility, and organizational alignment.

For more information, please contact Tracy Palandjian at tracyp@parthenon.com or visit www.parthenon.com.

About The Rockefeller Foundation

The Rockefeller Foundation fosters innovative solutions to many of the world’s most pressing challenges, affirming its mission, since 1913, to “promote the well-being” of humanity. Today, the Foundation works to ensure that more people can tap into the benefits of globalization while strengthening resilience to its risks. Foundation initiatives include efforts to mobilize an agricultural revolution in Sub-Saharan Africa, bolster economic security for American workers, inform equitable, sustainable transportation policies in the United States, ensure access to affordable and high-quality health systems in developing countries, accelerate the impact investing industry’s evolution, and develop strategies and services that help vulnerable communities cope with the impacts of climate change.  For more information, please visit www.rockefellerfoundation.org.

For more information, please contact Teresa Wells at 212-852-8304 or twells@rockfound.org.

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