Impact Investing:
How do we ensure that this field has a
growing and enduring impact?
Sebastian von Stauffenberg
CEO of Mi...
2
Responsible investing
0% Financial
Return
Target
Social
Impact
Target
Financial
Return
“Do not measure” “Do no harm” “Do...
3
Microfinance and impact investing
 Impact investing - $89 billion in AUM
(Dec. 2012)1
 Microfinance - $8 billion (Dec....
4
The story of microfinance
Euphoria to Correction
1970s-1980s
Birth
1990s
Emergence
2000s
Over-exuberance
2010
Backlash
T...
5
Microfinance fund investment
2010 2015 2020
Commerical
Quasi-Commerical
Public
US$21 billion
in 2020
US$7 billion
in 2010
6
Spectrum of impact investors
Return expectations
Philanthropy Investing
0%
Financial
Return
ReturnsReturns
Donations
& g...
7
Impact investing today
Fiduciary Responsibility
Challenges
 Limited absorptive capacity
 Undefined credibility/ track ...
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Sebastian von stauffenberg impact investing- june 2013 v4

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TBLI CONFERENCE™ is the prime annual global networking and learning event on Environment, Social, Governance (ESG) and Impact Investing.

TBLI CONFERENCE USA New York 2013
Monday and Tuesday, June 17-18, 2013

Speakers:
Paul Rose
Vice President of the Royal Geographical Society
Richard L. Kauffman
Chairman for Energy Policy and Finance for the State of New York - Governor of New York's Office and Cabinet - United States of America
Martin Rapaport is chairman of the Rapaport Group and founder of the Rapaport Diamond Report

Published in: Economy & Finance, Business
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  • NOTES:Prompt from Bob: talk about credibility and fiduciary responsibility and the risks that are present.  This might be in the context of the journey that impact investing has travelled since MicroRate was started.Program description: Balancing Performance, Risk and Social Returns of Impact Investments: A Case Study on Microfinance Funds
  • Return expectations. Impact investing a subset of responsible investing and aims to do good.
  • Separate studies by JP Morgan and the Monitor Institute estimate that impact investing will reach $400-500 billion by 2020impact investing fastest growing segment of Responsible InvestingCross boarder impact investing is 8+ billion of which Microfinnce and SME are 85%
  • In a column in the Washington Post, Sebastian Mallaby, referring to subprime mortgages, describes what is happening in the following terms: The meltdown in financial markets may seem scary or mysterious, but it's part of a time-honored story. In Chapter One, a new financial instrument makes capital available to a new class of borrower, and the result is profits for the innovator along with gains for consumers. In Chapter Two, a group of not-so-smart investors misunderstands the novel instrument and bids its price up too enthusiastically; when the inevitable bust follows, the innovation is denounced as inherently dangerous. Then, in Chapter Three, the complaints blow over. The not-so-smart investors learn their lesson and the new instrument stabilizes....This is likely to be the story with the current subprime mortgage meltdown, just as it was with subprime's close cousin, the junk bond..Sebastian Mallaby’s column highlights that at the heart of the cycle, which leads from euphoria to a correction, is a disregard for the relationship between risk and return. The Pain, and Gain, of the Subprime Meltdown.Sebastian Mallaby, Washington Post. August 13, 2007.
  • Lack of Information and insights (mention Luminis or PRSM here), Credibility: Meeting expectations and fiduciary responsibility "non-profits and governments satisfy need, business meet demand. Impact Investments  have Atlantic Ocean sized need but Lake Michigan sized demand. Reality will eventually dawn and Impact Investing popularity will end.", Absorptive capacity – ability to scale up.  Capital could be found but investment opportunities are harder to uncover
  • Sebastian von stauffenberg impact investing- june 2013 v4

    1. 1. Impact Investing: How do we ensure that this field has a growing and enduring impact? Sebastian von Stauffenberg CEO of MicroRate
    2. 2. 2 Responsible investing 0% Financial Return Target Social Impact Target Financial Return “Do not measure” “Do no harm” “Do good” Impact Investing $89 Billion AUM Purely Financial Investing $71 Trillion AUM Socially Responsible Investing $13.5 Trillion AUM Responsible Investing
    3. 3. 3 Microfinance and impact investing  Impact investing - $89 billion in AUM (Dec. 2012)1  Microfinance - $8 billion (Dec. 2012)2  CGAP study: Microfinance and SME funding is over 85% of international impact investing 1 As of December 2012, “Global Sustainable Investment Review 2012” 2 As of December 2012, “The State of Microfinance Investment: MicroRate’s 8th Annual Survey and Analysis on MIVs” Pending publication 91% 9% Impact Investing AUM Non- MIV MIVs
    4. 4. 4 The story of microfinance Euphoria to Correction 1970s-1980s Birth 1990s Emergence 2000s Over-exuberance 2010 Backlash Today Stabilization
    5. 5. 5 Microfinance fund investment 2010 2015 2020 Commerical Quasi-Commerical Public US$21 billion in 2020 US$7 billion in 2010
    6. 6. 6 Spectrum of impact investors Return expectations Philanthropy Investing 0% Financial Return ReturnsReturns Donations & grants Institutional Non-profits & Foundations Venture Philanthropy
    7. 7. 7 Impact investing today Fiduciary Responsibility Challenges  Limited absorptive capacity  Undefined credibility/ track record  Lack of objective information and insights Solutions for Fiduciary Responsibility  Insights using PRSM™ Methodology  Performance  Risk  Social  Management

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