Impact investing. Investments for influential baby boomers. Crisis on the brink of disaster

The basic idea of ​​“impact investing” is that funds are invested in a company, enterprise or fund whose activities can have a positive impact on the environment and/or social environment, and, in addition, generate investment income. Not only does the concept appeal to baby boomers, say money managers, but it can also become a bond between clients and their advisors.

“Baby boomers want to live more meaningful lives and are asking for portfolios to be structured around their values,” said Ron Corde, co-chairman of Genworth Financial Wealth Management. “Impact Investing resonates with their desire to be changemakers.”

However, “impact investing” should not be confused with philanthropy. In reality, these are commercially sound investments on which clients can make (or lose) money, proponents of the concept say. Likewise, they add, “impact investing” should not be confused with socially responsible investing, which, at least historically, has primarily focused on weeding out companies or economic sectors that do not meet relevant criteria from an investment portfolio. In contrast, impact investing typically places investor funds in companies involved in microfinance, energy, healthcare, water, affordable housing, and even charter schools. “This is a targeted approach, not a “shoot at squares”, as we have seen with socially responsible investing,” Corday adds. – At the same time, “impact investing” is not disguised philanthropy. It requires the same investment discipline and precision of calculation.”

“Impact investing can definitely beat the market in terms of returns,” agrees Raoul Pomare, managing director of Springcreek Advisors, based in Marin County, California. – This strategy does not imply the use of negative screening (selection by exclusion method. – editor’s note) of assets or reduction of portfolio risk. A company that does something good for the environment can also do good business, and investors put their money into well-run companies."
Pomare and a number of other advisers who have been involved in "impact investing" all this time say that interest in the concept is constantly growing. “It's been received with great enthusiasm in the investment fund community,” says Pomare, “and we're seeing more and more retail players interested in impact investing, especially in California and Massachusetts.”

“We're seeing growing interest from two groups: clients who are serious about philanthropy and see impact investing as an extension of that, and second-generation clients with a slightly different worldview who don't think there's necessarily a difference between good deeds and good fortune,” notes Deb Wetherby, CEO of Wetherby Asset Management in San Francisco.

Younger customers have grown up with corporations like the Body Shop, Ben & Jerry's and Whole Foods, Wetherby notes, and are accustomed to the idea that "companies that are good corporate citizens can also provide good returns on investment."

Because impact investing is a relatively new style of investing, there is not enough data to date to evaluate its returns compared to other styles of asset management. However, other forms of socially responsible investing have already shown that they are capable of delivering returns above the market average over certain periods of time, in part due to the fact that, for example, SRI is considered to be a company with poor corporate governance.

In addition, management companies have been impressed by the ability of “impact investing” to improve their relationships with clients, including prospects. “It's not just a line item on a financial statement,” Corday notes. “Influence investing gives advisors the opportunity to connect emotionally with their clients and creates an intergenerational bond between baby boomers and their children.”
“Influence investing” is “an opportunity to create deeper, more comprehensive relationships with clients,” agrees Pomare. “It changes the dynamics of the conversation and creates more sentimental assets.”

But, he warns, investor interest in impact investing must be “sincere and real. The actions of advisers who treat this simply as a purely marketing strategy will be perceived as “greenwashing” (a feigned attempt to present themselves as a person who cares about ecology and environmental protection - ed.). Such advisors may succeed at a certain stage, but their luck will quickly desert them.” At the same time, the long-term prospects for the development and spread of the concept of “impact investing” look very promising. “Today we are just at the very beginning, but over time, over the next three to five years, there will be more products and investment opportunities in this area,” says Cordes.

Moreover, “impact investing” and wealth management are ideal for each other, says Wetherby. “We try to help clients do what matters to them,” she notes. “Our work is much more than just numbers on a page.”

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[AUDIENCE] Hi Andreas. Thank you very much for the conversation. It was nice. I'm from Venezuela. Today we are experiencing a special moment, we are trying to escape from dictatorship. Curious what you think about government-backed cryptocurrency? The real one, not like Petro. Or is it better for our country and economy to accept the duality of fiat currency and all cryptocurrencies? [ANDREAS] That's a great question. State-owned cryptocurrencies will not change anything. By definition, they will be centralized, controlled, observable and closed. They will require identification and will only be available to a select few. We will see more and more government-owned digital currencies because we are entering the final era of cash. Cash will be eliminated in our lifetime. In any case, our children will never see money unless they visit a museum. They will be destroyed because unfortunately (from the point of view of the state) they create openness... for freedom where freedom is not allowed. Cash provides some flexibility in a system that makes even funny things illegal. Generally speaking, people who commit serious crimes do not use cash. They are difficult to move. For serious crimes, you need to buy yourself a banking license and use the bank to commit them. [Applause] But if you want to sell bananas on the street without any license, or sell CDs of South Korean movies in North Korea , or invest in an opposition political party, and all these actions are illegal, then cash is what you will use. Cash is disappearing. They are trying to destroy cash through government digital currencies. They are trying to create a panopticon, a virtual digital prison of money where everything you do is monitored... and tracked. At this point, your freedom is a double switch that they can flip: free or not free. One day, someone will walk through this control room and turn on all the switches. Click, click, click! "I won the election!" [Laughter] Of course you win. [AUDIENCE] Hi, thanks. It's difficult to settle on one question. We have a long history of cooperativism in Argentina... which has been destroyed by financial regulations that protect monopolies. A friend of mine used to run one of these. Cooperatives for work or lending were networks of trust. These were small regional networks with shared values. I like to call them value local area networks (LANs). But they could not scale or connect into strong national networks. I want to ask you: do you see a place for cooperativism and trust networks in the crypto space, alongside trustless networks? Oh, absolutely. A trustless network exists for edge cases. You need something to manage situations where there is no trust. But even though the vast majority of transactions between people occur on the basis of trust, you need trustless networks to make those transactions when you have no idea who that person is. This was not the case for most of the time the trade existed. We have been drawn into this space as the community has grown. For example, the more you use credit cards and digital money, the less you interact with local merchants. If you are a fisherman and have just caught a fish in the sea... and want to sell it to someone, you have two options in the modern world. You either accept Visa or you will need to change, right? Cash won't work in many places. Increasingly, cash is failing. People don't have cash or don't want to use it. It's difficult. I've been to Argentina four times. I know that when the long weekend comes, you start lining up in front of the bank on Tuesday because the tills fill up on Monday. If you are lucky, you can get 500 pesos notes. Otherwise, you will receive 100 pesos notes. Cash here is tricky. This is very difficult to explain to Americans who have never experienced it. I experienced this in Greece. I remember when there were no ATMs and banks were lined up with people. We ran around the banks trying to withdraw money. One of the reasons you don't have co-ops anymore is because local payment mechanisms don't work. Cryptocurrency returns them. You don't necessarily need a trustless blockchain to accept a transaction... from someone you know, right? So how would this relationship be expressed? Perhaps I will accept the transaction with zero confirmation. From some people in this room that I know, I would accept a transaction with zero confirmation... of some meaningful value, because trust is more important here than a network without trust. Over long distances, with strangers, you cannot do this. “No trust” does not mean we don't need trust, don't use trust, or don't want trust. It simply means that we have the ability to operate without trust. I really like the idea of ​​local cooperatives, especially in lending. I'm involved in some. To me these are old school ideas, before I started talking about Bitcoin. In the United States, there are these cooperatives where you can microcredit other people. Someone will post a profile on the site saying, “I'm a plumber and I need to outfit my van with new ladders.” “I need a loan for $250.” They then receive loans of $25 from ten different people, which they pay back... over six months and you earn interest. Currently, it is a market that caters to all those who cannot obtain a bank loan. The good news is that we can make this broader and more global now. The bad news is that the bank loan mechanism is failing all over the world anyway. Something has to come and change this. Let's hope this will be a more humane approach. [Applause]

Organization

The network, coordinating the efforts of social investors, was conceived by the Rockefeller Foundation, which in October 2007 brought together a small group of social investors to discuss the situation in the market. In addition to the Rockefeller Foundation, the initiators of the merger were also JPMorgan Chase and the United States Agency for International Development (USAID). At the same time, the term “impact investing” was first defined, and the needs of the markets that social investments were aimed at solving were discussed. 2007 is considered the year of formation of the partnership organization, although no new legal entities were created at that time.

A year later, in June 2008, a larger group of investors interested in the development of this area of ​​investors gathered under the auspices of the Rockefeller Foundation. The meeting discussed, in particular, the need to create standards in the industry, a methodology for assessing the effectiveness of social entrepreneurship, the possibility of solving more social problems by joining forces, etc.

The formal founders of the organization were leading market players. Among them, for example, Oxfam and Shell Foundation, from asset owners; Royal Bank of Canada, from asset managers, Endeavor, UK Department for International Development, Dutch Ministry of Foreign Affairs from sevice providers and others.

The organization's first executive director was Luther Ragin Jr. 2015 Chief Executive Officer is Amit Bouri, formerly director of strategy.

Headquarters Global Impact Investing Network located in New York, USA.

The organization's activities are funded primarily by the Rockefeller Foundation, but sometimes support comes from other members, such as the Omidyar Network and USAIN.

Activity

Main areas of activity Global Impact Investing Network become :

• Advocating for impact investing.
• Bringing together players in the impact investment market.
• Creation of Impact Investing Market Knowledge Base ImpactBase.
• Development of a methodology for assessing the social effect of impact investments and standards for this area. Impact Reporting and Investment Standards (IRIS)).
• Coordination of efforts through the Investor Council and working groups aimed, for example, at sustainable development agriculture in Africa, or providing small and medium-sized enterprises with access to financial infrastructure and resources.

Notes

1. Kevin Davis, Angelina Fisher, Benedict Kingsbury, Sally Engle Merry. Governance by Indicators: Global Power through Classification and Rankings. - OUP Oxford, 2012. - pp. 405-409. - 504 s. -

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Past performance is not indicative of future results. Diversification does not eliminate the risk of loss. Morgan Stanley and its affiliates do not, directly or indirectly, guarantee, assume or otherwise insure the obligations or performance of any fund or any covered fund in which such fund investments.

I. The paths became straight

Crisis on the brink of disaster

Professionals warn: the world is inevitably creeping into a slowdown crisis. It would seem that the good is so hostile to the best? Thin growth is more comfortable than good decline...

But stagnation is only possible in “one individual country,” which immediately falls out of the global race. It is no coincidence that the dying slogan of the USSR was “acceleration” - at any cost.

History remembers: a slowdown in growth is the threshold of social disasters. To survive, the world, according to Carroll, is doomed to run at full speed. As soon as the supply of social goods slows down, the shadow of overtaking demand looms behind.
Unlike the benign curves in economics diagrams, real conflicts of supply and demand are resolved with great blood. The growth of supply is cyclical, but demand grows non-stop: in poor countries - along with the population, in rich countries - along with progress. It is stopped only by social catastrophe, devouring the population and undermining progress, coupled with faith in it.
Demographic explosions and ecological spasms, the impoverishment of pastures and arable lands are destroying the balance of forces of attack and defense, uprooting masses of people from their homes. History is inexhaustible in its plots, the finale of which is waves of resettlement of tribes and invasions of the peoples of the sea, Amorites and Ottomans, Vikings and Huns, “the scourge of God.”

In the 19th century, blows became more frequent. Financial crises, interrupting the rise in production, turned into revolutions like those of 1848, when a tornado seemed to pass through Europe.

By the beginning of the last century, capital markets had run into each other, and there was nowhere for them to grow. The epochal meaning of the exhaustion of expansion space was shown and predicted by the economist Marx.

The response of the social elements to the cessation of growth is a monstrous sandwich of two world wars with a layer of revolutions, depressions and devastation. The battles of the Marne, Verdun, the Somme, the Entente offensive in 1917 and the Germans in the spring of 1918 - each of those meat grinders was more voracious than the largest natural disasters in history. The “interwar” period turned out to be deadlier than the First World War. The second surpassed her in bloodthirstiness three times...

The stump of demand has fallen out of the Procrustean guillotine of supply. And the dawn of post-war growth and economic miracles broke over the battlefields. From Tsushima to Hiroshima, it took forty years for the curves of the Marshall Law to meet with the planned support of the namesake general.

Few witnesses to this cosmic drama are still alive. But the philistine memory suffers from amnesia and groundless optimism. Somehow it is believed that the current stagnation will be stopped by the competent bodies of the G8, and everything will return to “normal,” by which I would like to mean a satisfying pause between the two previous crises.

Meanwhile, a new migration of peoples is on the doorstep. Suicide bombings are already routinely merging into the dosimetric crackle of a reactor. On the global periphery, unknown forces, unnamed just yesterday, are expropriating the owners of fields and valuable cargo. Pirates from Somalia's Puntland are setting their sights on tankers, and Tuareg separatists are cutting off the routes to Malian uranium and gold. And whose hemp is now overgrown with Kosovo field? Whose fires are burning in the suburbs of Stockholm and Paris? Is Yaroslavna crying in Putivl, or is it the muezzin?

A stranger, a nomad, a migrant came - and his own, dear, lo and behold - he was already over the hill.

Innovation pause in Kondratieff cycles

Even a schoolchild today has heard: economic growth resumes when people invent and massively apply new technology, which means they begin to produce more energy, matter, food and heat per unit of time...
The technocratic idea of ​​a “base” that pushes the productive forces forward is attributed to Marx. According to “historical materialism,” production develops in cycles associated with the emergence of new technologies and tools. And those who try to interfere burn in the cleansing flame of revolutions.

Later researchers linked this idea to empirically observed “Kondratieff cycles” in social productivity growth. The best minds set out to find explanations for cyclicity. According to one of the advanced hypotheses, economic development is based on energy production technologies, the change of which, in turn, is associated with the transition to a new type of energy carriers. Hence the idea of ​​the cycles of wood, coal, oil, gas energy, generating their own worlds with new methods of production, global leaders and living standards.

Simpler thinkers tend to add whatever they like to the pile of system-forming technologies: the steel industry and railways, electric motors and big chemistry...

There is complete expert consensus on the latest wave. It is believed that from the middle of the 20th century. Computer and network technologies play the role of global growth driver. But the impetus they gave to the development of the world economy has apparently been exhausted. And the world, fidgeting impatiently, waits to see when and which of the new technologies will take over.

Among the candidates widely discussed among authoritative bloggers and government experts are space and nuclear energy, bio- and nanotechnology. Regarding the first two, there is a complete misunderstanding: the technological base of both industries is firmly stuck in the past. The Korolevskaya “seven”, which launched the first satellite, remains to this day an orbital workhorse, without competition in terms of low cost and reliability. In nuclear energy, since the time of Kurchatov, conservative reliability has stifled innovation. As for nano- and bio-miracles, over time they may become growth factors, but for now, on the contrary - like little children, they require many years of effort and trillions of dollars in investment in R&D.

The academician in “Questions of Economics” gave the circumstance of technological delay the character of a scientific hypothesis, according to which an “innovation pause” has occurred in the world. Its mechanisms are fundamentally uninteresting to scientists. Another thing is more important: the “innopause” leaves no hope for pregnancy, which is fraught with a new techno-miracle that could save, if not the world, then at worst the Dow Jones index.

In short, in a language understandable to Russian business executives, the hypothesis says: this season the “northern delivery” will no longer take place.
But if that’s the case, your teeth are on the shelf! The global world order is doomed to a hard reset. Not everyone is destined to survive it.

The end of modern times

Where did the new lifesaver end up, and is it possible to help the trouble?
Innovation pause – between what and what?
Let's take a closer look at the list of techno-factors associated with Kondratieff cycles.
Firewood. Coal. Oil. Gas. Steel. Electric locomotives. Internet.
Looks strange.
How did IT get into the company of strong manufacturing technologies? They don't plow on processors. Global nets do not scoop up schools of fish.

A fatal feature of the First World War included attempts to consciously transform the drawings of inventors, first into a destructive force, and then into a productive one. Tanks and machine guns, airplanes and zeppelins, gases and gas masks - the arms race in the interwar period was converted into “scientific and technological progress”.

Unfortunately, from those same ancient years to this day, the philistine tradition continues to mean that scientific and technical progress is primarily the development of production technologies, losing sight of the fundamental contribution of managerial and financial technologies.
Victories in the Second World War were achieved, as a rule, not due to the perfection of weapons - thanks to intelligence, their combat qualities were comparable among the warring parties. Allied air supremacy was ensured by the high efficiency and cost-effectiveness of mass production of IL-2 attack aircraft and “flying fortresses.” It was a triumph for planners and financiers. However, unlike aircraft designers, the heroes mostly remained nameless.

The leaders of the atomic projects, Generals Groves and Vannikov, were, of course, outstanding organizers. But the development of management technologies was not considered a “science.” It still doesn't count. In the structure of branches Russian Academy sciences “control processes” are combined into one department with energy, mechanical engineering and mechanics, and “ information Technology» – with nanotechnology. The description of the department of social sciences reads like a song, but “technology” is mentioned there again in connection with computing systems. In other words, they are understood exclusively in a narrow material and technical sense: “You wash the thing!”

It’s not so much difficult as it is sad to explain the point of an anecdote.

“It is curious that when it was necessary to register the All-Russian Union of Writers, there was no branch of work in which the work of a writer could be classified. The Writers' Union was registered under the category of printing workers, which was completely ridiculous."
(Nikolai Berdyaev, “Self-Knowledge”).
The productivity of socio-economic systems is not at all the same as “labor productivity”. Moreover, “labor,” in accordance with the prediction of a century and a half ago, is gradually disappearing with the advent of technology. In particular, it is already being forced out of production by “flexible systems” machines. The productivity of society is a nesting doll from a number of institutions, where the total economic power “from within” is limited and determined by efficiency, which, in turn, contains the Koshcheev needle of value. Moreover, we are talking specifically about the effectiveness of regulatory institutions - not about the efficiency of machine tools or boiler houses, but about the quality of the system of management relations between production participants. And Norbert Wiener will not help here, but there is no way to do without Emile Durkheim...

At the end of the 60s, it was in this field that the Soviet Union lost the race of management technologies, in which it had previously been in the lead for three decades.
IT alone could not be the driver of global economic growth. But they reflected it: they were a projection of the development of institutional technologies onto the plane of their “physical”, instrumental implementation. Real growth was ensured by a wave of managerial discoveries and inventions, new corporate structures, planning and coordination methods. For example, problems of life cycle management of complex technical objects were posed and solved; as a result, IT tools such as PLM (Product Lifecycle Management) were tailored to them - but not vice versa.

Modern times ended in 2008 without ever happening.
This is the first time since pre-Petrine times that Russia has fallen so radically out of context. What now replaces our picture of the world is not even a mirage, but a misunderstanding.

Five years ago, in Expert, I already had to write that a new wave of growth in the post-crisis global economy would be ensured by the development of new financial technologies. Now it turns out that exactly at this time the indicated wave in the West acquired its original form, name and subject. Today its creators declare that the period of conceptualization and organizational design has long been completed, and the construction phase of a new global market is in full swing.
What is it about?
Where are we?

II. Impact Investing: New Wave Designers

World bermudier

In the serenely fat year of 2007, among the many concerns of prosperity, the Rockefeller Foundation did not forget to gather thinkers and practitioners at its villa in Bellagio, prophetically puzzling them with a paradoxical topic: how to create a global industry of commercial investment in solving social and environmental problems?

The intense work of thought took place in difficult conditions: on a cape jutting into the legendary Lake Como, on the shores where in the old days Virgil and Pliny the Younger had villas, and now George Clooney himself settled. The magic of the place played its role: prisoners of thought minted the concept of “Impact Investing” - a coin that turned out to be irredeemable.

A year later, a crisis of such magnitude broke out that Western leaders were ready to grasp at any straw, including intellectual ones. The authors of the concept were again urgently called under the banner of Bellagio. The Rockefeller Foundation, without delay, established the Impact Investing Initiative, for which the Board of Trustees allocated $38 million to begin with - and the work began to boil.
What are its fruits five years later?

The wave of new growth technologies is rising ever steeper. It is actively acquiring its own institutions and standards. The Global Impact Investing Network (GIIN) has been operating since 2009. Its governing bodies include major financial institutions such as J.P. Morgan, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Prudential, UBS, as well as leading charities, private firms and government departments. The movement is actively supported by the American government Overseas Private Investment Corporation (OPIC), the Agency for International Development (USAID), and the US Small Business Administration (SBA). However, the wave is globalizing before our eyes. Impact Investing events, projects, government programs are carried out in Mexico and Brazil, South Africa and Kenya, Britain and Holland, India, Singapore and Australia. Classifications, databases and standards for evaluating projects in line with Impact Investing have been developed and applied in practice. The world is experiencing an explosive growth in interest in the new generation of financial technologies; conferences on Impact Investing issues attract enormous crowds.

The leaders of the wave claim that the stage of formation and conceptualization has long been completed. Today it is in the phase of active market construction, the formation of its infrastructure, which reduces transaction costs. According to the designers, this market is intended to become the main channel for the investment mainstream in a few years.
In short, the idea of ​​covering the vast scope of Impact Investing’s work in a short note would look a little strange. If not for one “but”.
What remains is the Bermuda zone, the size of 1/6 of the earth’s landmass, where in all questionnaires in the languages ​​of the peoples of the USSR, in the Impact Investing column it is written “was not, did not participate, was not a member.” A search on the RuNet on the topic brings up a single link to an article from a two-year-old bottling. Familiarization with it shows: the author has obvious problems, and not only with English...

“And there, in the depths of Russia, -
There is centuries-old silence there.”

Nekrasov's innocent poem in 1857 was not allowed for publication by vigilant censorship.

New wealthy prose writers

Impact Investing is not a trademark of a particular investing technique that has recently come into fashion. This is the collective name-concept of a new wave of financial technologies, which has been taking shape for several decades now, and on its crest carries many innovations. It is functionally similar to the term "prose", which is used to designate a common type of discourse. Only the writers of Impact Investing are more serious people than Mr. Jourdain, mainly from among the “high net worth individuals,” the new generation of wealthy individuals. They are said to strive to “embody their values ​​in their investments.”

Unlike laws that do not have retroactive effect, the concept of Impact Investing is aimed at the active and even aggressive development of the past, absorption, rethinking and repackaging of its financial inventions and practices. At the same time, there are no special problems with copyright.

For example, Wayne Silbey, founder of the $15 billion Calvert Fund in Maryland, notes in passing that he has been practicing Impact Investing since the late 1980s. That doesn’t stop him from acting as a promoter and enthusiast of the new wave of financial technologies.

Among the icons and participants in the movement is Pierre Omidyar, the creator of eBay, who ranks third on the list of young American rich people.

More complicated is the relationship between the new wave of investment designers and maestro George Soros. The Economist magazine, in an article subtitled “A Magical New Asset Class,” explicitly lists Soros as a backer of Impact Investing.
The authors of the strategic report, published under the auspices of the Rockefeller Foundation and J.P. Morgan, be more careful in your wording.

“Innovations in the development of the financial sector will have critical importance and transformative potential. Over the past decade, the UN and prominent financial professionals such as George Soros have been intensively developing a number of new financial mechanisms aimed at addressing global problems such as AIDS and global warming... Impact Investing is an industry and movement that is making its own concrete and growing contribution to this broader search for financial innovation, both from the supply and demand side of investments, and in the field of intermediation. In this sense, the success of Impact Investing is truly significant for the world.”

However, the initiators of the movement, Anthony Bugg-Levine and Jed Emerson, in their book “Impact Investing: Changing the Way We Make Money, Changing the World for the Better” point out the significant fact that Soros actually invested $200 million in projects that follow the Impact Investing line. through the Soros Economic Development Fund.

Blending of values ​​and paradigms

What does the new sign mean?
Seven years before Bugg-Levin launched the Impact Investing brand, his co-author Emerson staked out the term “Blended Value” - a combined (or rather even blended) value. The fact is that until now in Western discourse we have been talking about two polar goals of activity, implying two incompatible values ​​as their basis. Either we strive for high incomes - then we should put aside all thoughts about the good of our neighbor as not related to business. Or the task is set to solve social or environmental problems of the broad masses - then professional charity appears on the scene with its tools that are incompatible with the pursuit of profit. The Westerner Chatsky warned against attempts to mix these two crafts. Now Emerson has corrected him.

As it turns out, in modern practice, all other things being equal, of two businesses, the one whose owner consciously strives to achieve socially significant goals will ultimately be more successful. And on the contrary, the long-term trend of modern charity is the transition to strict investment standards for the preparation and financing of projects, in particular, in line with the concept of “social entrepreneurship”.

For people raised in the culture of trinitarian thinking - in the Christian or Chinese version of it - Emerson's “combi-value” is akin to trying to break into a wide open gate. But it radically changes the black-and-white picture of Western management.
Richard Koch, an Oxford and Wharton graduate and BKG consultant, coined the phrase in which he immortalized the “Boston Matrix”:

“The Boston Consulting Group has introduced several types of matrices into scientific and practical use; it is rightly proud of the ability of its workers to think in terms of two-dimensional abstractions.”

The Boston matrix (more precisely, its varieties) is a typical product and tool of binary thinking. For each object and phenomenon, it generates 2x2 classifications, where the mental boundary between “lame ducks” and “cash cows” is almost impassable. This also includes the Ansoff matrix, Adizes classification of managers, Cox and Stevens ternary sales typology, etc.

It’s amazing but true: Impact Investing’s main classification tool, the Capitalization – Coordination matrix, is a 3x3 table. Where MBA graduates see four entities, the trained eye of an impact investor sees nine.

Such a radical shift in the business paradigm is no laughing matter! – society is capable of moving forward only in the face of a mortal threat to the very foundations of its existence.
We are talking about the catastrophe of a long-term slowdown.

Non-monetary minters

New investment planners are challenging growth by consciously pursuing Blended Value. The wave of financial technologies Impact Investing is precisely what claims to equip them with tools and standards.

Impact Investing ideologists point out that the movement was born as a result of the interaction of four key factors:

In-depth analysis of the risks of investment decisions initiated by the financial crisis of 2008-09;
Growing awareness of the fundamental lack of resources in the face of severe poverty, inequality, environmental destruction and other complex, global problems, especially as Western countries are forced to cut their international aid budgets and domestic social problems;
An expanding range of practices that demonstrate the ability to finance scalable business models that produce socially significant results;
The transfer of wealth in industrialized countries to a new generation of wealthy individuals seeking to embody their own values ​​in the way they allocate their capital.

The work field of Impact Investing today is almost endless. It resembles the lava field of an active volcano. Thousands of projects are being implemented on all continents, and there are hundreds of research groups engaged in the development of financial technologies, tools and standards for dozens of specialized types of market participants. Research budgets alone amount to many millions of dollars, and estimates of the size of the market as a whole in a five-year perspective range around a trillion.

However, gradually shifting the focus of the review from the position of investors towards investment consumers, one can see three concentrations where the interests of players are concentrated today. Each of them, for its description, generally speaking, requires separate terminology. And here we can see the reasons for the current untranslatability of “Impact Investing” into any language – including English.

Impact Investing is the development of new financial technologies, tools and standards, the formation of a new layer of management and intermediary structures to ensure access for investors of the “global North” to those areas of the economy of the “global South” that were previously inaccessible to them. (“Conditional investing”).

A favorite example (rather for ideological reasons) here is “microfinance”. In the countries of the global South, various local markets for financial services are being built for a meager amount (like ten dollars) to millions of poor clients. An ordinary investor invests in the creation of a financial whale that sifts out the plankton of micro-borrowers with its whiskers. But for this to become possible, Impact investments in information and service networks must first take place. Thus, a community of small farms in one of the countries of tropical Africa is connected to the services of a specially created network of simple mobile devices, which allows, for example, to quickly order a veterinarian’s service and pay for it using a virtual microcredit. The role of Impact investor who invested in the network deployment project was a private equity fund, created at one time with the participation of the British government. The mobile telephony network itself would not pay for itself soon: local residents have neither the skills nor the motivation to use the telephone. But the interdependence of the project floors works: it is the loading of the network with microfinance services that creates additional traffic, allowing the Impact investor to live up to profit.

Impact Investing is the use of new investment tools to solve social and environmental problems in the investment area, overcome poverty, and involve local investors and local communities in launching growth mechanisms. (“Development investing”).

Wayne Silbey, who never misses a chance to promote himself, says:
“About eight years ago we invested in a Chinese environmental fund in Beijing. Only six investors were interested in this small fund, and only we were from the United States. People then thought it was eccentric for me to hope that the Chinese would ever care about their environment. The fund now has hundreds of millions under management and is the hottest cleantech fund in China where commercial investors come knocking. I have no doubt that it was the Impact investment that brought us an outsized return.”

Impact Investing – development methodological recommendations, technologies, economic policy tools for governments interested in attracting a new class of investment. (“Local Investing”).

This is a dedicated, fast-growing area of ​​Impact Investing. For example, it operates a special network structure, Impact Investing Policy Collaborative. In the US and UK, government departments have policies in support of Impact Investing. But besides this, government events are being implemented in Brazil, Kenya, Malaysia, South Africa...

In general, it should be noted that Impact Investing provides a powerful practical justification for the new apologetics of capitalism: it turns out that the pursuit of profit is quite compatible with solving the social problems of the Third World, with the struggle for social justice...

However, the cynical formulations of the Impact Investing ideologists on the issue of the new role of the state will strain Russian censorship, rightly so, worse than the propaganda of homosexuality:

“In developed economies, Impact Investing leaders are clear that government can, should and must play a key role in industry growth. This is also realized in the BRIC countries, where the state is an integral, major player in almost every area of ​​the economy.
Governments can play a powerful, direct role in the Impact Investing market, using their financial power to secure worthy investments with cheap, stable capital, and through guarantees, moderating the risks of private and non-revenue investors in syndicated deals."

Because of this kind of political incorrectness, the night watchman's invisible hands fall...

III. Impact Investing: from the depths

I love this word very much
But I can't translate...

Let’s ask ourselves the simplest question that inevitably comes to mind when familiarizing ourselves with the “combined value” paradigm of Blended Value.

Whose values ​​exactly are combined in it?

Let the investor be sincerely inspired by the idea of ​​making the inhabitants of the Sahel happy with clean water, which is of the highest value to them. But does he himself suffer to drink this water? On the other hand, let the victims of the arid climate strive with all their hearts to improve the investment climate. But even if this is the case, the investor’s desire to get maximum profit does not become their own need.

The conclusion suggests itself.
Several agents take part in the Impact Investing act: investment providers, their recipients and (in general) intermediaries between them. Each of the participants, naturally, has their own goals and values. So, at least one of the participants (namely the investor), striving to achieve his goals, consciously takes into account the goals and values ​​of some other participants and contributes to their achievement.
Actually, this unnatural behavior of the participants is called project investment(as opposed to business lending), and the entire act as a whole is an investment project.

Invisible hand versus invisible hand

How did normal Western businessmen, destined to gnawing at the throats of their competitors with gusto, come to live like this?
Project investment is opposed to normal, that is, forgive the tautology, “investment”. The investor arrives in the Land of Fools and quickly scans the Field of Miracles. There are numerous project holes where you need to bury gold in order to later extract two or three from there. At the same time, the investor is completely reluctant to dig into what is happening in which of the holes. Instead, he seeks to entrust all the fields of wonders of each country of fools to the local Alice & Basilio exchange, while he himself is engaged in diversifying investments to avoid risks.

When an investor gets rich, he stops running around on his own; on the contrary, all representatives of the above-mentioned countries interested in investing come running and jostle around him with papers. To systematize and organize this crowd, a stock market is established. It’s also a shame for investors to go there now; a team of hired brokers works there. But in order to avoid inconsistency and arbitrariness in their activities, stock market theorists, based on statistical laws, derive theories of correct investment. As theories are refined and molded into mathematical formulas, the work of brokers begins to be delegated to trading robots.

The investor has isolated himself from the specific content of projects by the stock market;
then he placed brokers between himself and the stock market;
between brokers and projects he inserted papers issued on their behalf;
then between the broker and the securities market he placed formulas and statistical patterns of fluctuations in the value of securities;
then I placed trading robots between the formulas and papers...
and now the robots automatically, on his behalf, begin to rush around at an insane speed and invest in papers, invest, invest...

The apotheosis of the invisible hand is coming, to which the investor, 100% freed from the hassle with the content of projects, has given complete freedom to invest on his own behalf. He sold himself to the “invisible hand” wholeheartedly, handed it all the responsibility and indulged in the bliss of unalloyed values. He didn’t read it himself, but he heard: either Adam (Smith) or the story about the Inquisitor said that the hand does better.

But at this moment, alas, a completely different invisible hand appears. The investor and the guests of his feast have the opportunity to observe only a brush that draws fiery letters on a flipchart.

This is the meaning of the great crisis, which did not begin in 2008 and did not end in 2009, but its contours clearly emerged at that moment. And the response of the living forces of the Western world was the first step towards the transition from clients of the invisible hand to agents of the invisible hand.
Impact Investing, project investing.

Comrade Buffett's course

Impact Investing's court historiographers are casting candidates for the roles of prophets, forerunners and founding fathers, going back to the Quaker era. But they missed the gigantic figure of the classic under their noses. Warren Buffett was the first among billionaires, both in practice and in theory, to reject standard investing in the name of project investing.
Buffett's paradigm is to invest not in securities, but in a specific company, having found out exactly how it is structured, what its team wants and can do, what are the prospects for its field of activity and the demand for its products. Correctly assessing a company's performance means, among other things, understanding its goals and values ​​in order to integrate them into an investment project.
Buffett's paradigm has bravely resisted the seemingly invincible pressure of the old mainstream for decades. Buffett is an absolute bad manners, a marginal, a nerd with fifty billion in the pocket of a jacket bought at a sale. His main business has been growing, for almost half a century, by more than 20 percent a year. If he had not been the financial champion of the world, he would, of course, have been spat upon and ridiculed. Instead, he himself gives an Olympian smile:

You don't need to understand beta, efficient markets, modern portfolio theory, option pricing, or emerging markets to be a successful investor. Most likely, not knowing all these terms will only benefit you. Of course, this approach is not taught in most business schools. On the contrary, all of the above occupies an important place in the curriculum for the subject “finance”. It seems to us that future investors need to carefully study only two courses - “how to correctly evaluate a company’s activities” and “how to relate to market prices.”

Nowadays, the provisions and conclusions contained in the speeches and speeches of the respected leader, Comrade Buffett, form the basis of the advanced theory and practice of the broad masses of Impact investors.

Predictable future

The efficiency of impact investing in its current conditions is hopelessly behind the locomotive. So what? It's a profitable business. Venture capital funding for innovation in Silicon Valley remains woefully ineffective to this day. But in other places it does not work at all. You don't have to choose.

The creation of something new in the regions of the West moves evolutionarily, like a herd of bison, sweeping away, eating, trampling everything on its way. If you come across even a chasm along the road, it will be filled with the carcasses of pioneers.

But for residents of the blessed lands of “catch-up” or “dependent” development, if they take it into their heads to borrow and transfer the wonders of Impact Investing to their glades, there are a number of banal but practical advice.

The fact is that during the transfer, what is transferred can change beyond recognition.

The word Investing in the title indicates that project activities are still being considered and described from the investor’s perspective. But the latter, with all due respect to him, is not the only participant in the project - that’s why he is Blended. The experience of private equity funds suggests two more equally important positions in the project: value chain management and capitalization management of specific assets. The description of the same subject - cost management, from these positions will be significantly different, similar to the female and male approach to marriage.

But that's not all. There are two broad professional areas of project activity where the expansion of the impact approach is just beginning. This is, firstly, the area of ​​infrastructure projects, where performance management, requiring organizational competencies, comes to the fore. Secondly, the highly professional world of production projects centered on power management, where engineering competencies are in demand. Investments are needed in both the first and second cases, but as they delve deeper into these areas, investors feel more and more insecure.

If we put the types of investment projects on one axis, and on the other, the set of roles of their main participants, we will get a matrix of required standards, which in the current way would not be enough to cover the entire budget of the Rockefeller Foundation. Current means empirical. Here we cannot do without connecting the potential of systematized knowledge. Moreover, over the course of a century it has already been practically developed in the broad mainstream of the institutional approach. The Great Commons proposed a comprehensive typology of transactions that the academic community has stared at blankly for eight decades. Hopefully, project investment practices will be sorted out faster.

So, the scale of required design standards begins with the position of the investor and ends with the symmetrical role of the engineer. Engineering sets the level of competence that financial technologists must overcome. Engineering uses a special kind of knowledge about artificial, designed objects. The laws of physics, chemistry, and biology are not violated there - they work as part of engineering disciplines such as strength of materials. As a result, metal structures rise into the sky and fly higher than birds. In short: project investors need computer-aided design systems into which institutional knowledge is programmed. Impact Investing standards, or more precisely what they are called, are still far from what they are expected to become.

The investment technology wave faces a challenging future. It is still capable of breaking up into several waves with a special name and destiny. It can overlap another, no less large-scale one, creating dizzying interference with it. Then, perhaps, the generation of new financial technologies will acquire its true name instead of the substitute name Impact Investing.
In the meantime, one thing can be said for sure: the wave will not pass by. Its power is already lifting us up.
More precisely, we hang out in it like an invisible asset in an ice hole.

Let's look into the face of tragedy. Let's see her wrinkles

There are loud words, ceremonial words, empty ones - but creating the illusion of full ringing. Like a “national catastrophe.”
And there are quiet, insignificant ones, as if erased - like Impact Investing.

What if the Soviet nuclear project, hot on the heels of the Manhattan one, ended in failure, in nothing?
Shame, national catastrophe. It’s not even about the fact that they would certainly start bombing us – it’s not a fact. But this would be an unimaginable humiliation of the country, a complete collapse of its leadership, a failure of the scientific class. We would have to retreat from the Yalta borders. There would be no Gagarin, the space race, heroic physicists and lyricists, Cuba and Vietnam, the Aswan hydroelectric power station, the Baikal-Amur Mainline and the Kursk submarine...

Now let's try to imagine a different story. In the sixth year of the Manhattan Project, when nuclear tests and the deployment of bases around the world are already in full swing, no one in our country suspects about it, and is not particularly interested. The president of the united Academy, Trofim Denisovich Lysenko, closed the irrelevant atomic topic long ago. Lieutenant Flerov has nothing to write to Stalin about; he is enthusiastically sawing a grant on the topic of irradiation of root crops. Beria's intelligence officers, trained in tank secrets, work part-time for eccentrics in Los Alamos, tinkering with some kind of plutonium in order to save up for girls and a lefty vacation in Miami. Analysts at the Council of Ministers are writing reports on the fight against locusts and global permafrost thawing.

The dim mirror of Impact Investing reflects an unusual, cruel picture of the world, where an empty space yawns along the contours of the country.
But this is not even about that. Not about that at all.

For those interested in actively aligning their entrepreneurial activities or finances with their values, now is an exciting time. Not only are there more opportunities returning than ever before, but also the ever-improving deal structure allows you to access your investments better and faster. This is especially important for eternal tourists and curious readers of our site.

The opportunities to help people in countries with less developed markets or frontier financial markets lift themselves out of poverty and lead healthier, more engaged lives are truly enormous. Moreover, the stock market infrastructure is being transformed to encourage and finance these types of ventures.

Many definitions have been used to describe investments in social sphere(Impact Investing) such as: social entrepreneurship, triple bottom line, environment, social issues, internal affairs, ongoing corporate social responsibility, socially responsible investing or green investing.

In order for us to understand each other, I want to very precisely define what impact investing is. My definition comes from Jed Emerson's idea of ​​“combined value.” This refers to the use of capital to maximize the total value of a combination of three factors: financial, social and environmental. Simply put, I am talking about investing that is profit driven but socially responsible.

The modern financial world includes three sectors: private commercial organizations, public (state) and non-governmental public organizations (NGOs). For the most part, the areas of each sector are clearly separated. Financial flows and opportunities do not cross sphere boundaries, with the exception of charitable donations. Now this situation is beginning to change.

Today, the blurring of boundaries between sectors is due to a growing international movement known as impact investing = social investing! Beliefs and investing go hand in hand.

The idea behind this is not a new one. In the Western world it has an echo in the Quaker movement in the 17th century, who aligned their investments with their principles. As recently as the early 1970s, we saw the rise of socially responsible investing (SRI), where investors used various types of social assessments to help them invest in accordance with their values.

The rapid growth of SDI and its use for negative social evaluation in the liquidation of public companies whose values ​​or products do not meet the needs of the investor came as a surprise to many. A similar challenge for society was Milton Friedman’s prediction that “corporate social responsibility should help increase profits.” The fact that by 2007, in professional management, every dollar in nine was invested using social assessments proves that people want to invest money in accordance with their values.

During the same period—from the 1980s to 2005—the number of non-profit organizations and NGOs increased. This growth was a direct reflection of the frustration and disillusionment of most people with the traditional way of doing business. Long before the global financial crisis of 2008, it was obvious even to outside observers that many of society's persistent problems had not been adequately addressed.

The financial collapse prompted society to change. Social investing, still in its infancy, became a beneficiary of the fallout from the 2008 crisis as people from different parts of the world re-examined the financial system, their role in the system and their investments.

Related to SDI, impact investing primarily addresses publicly traded companies that are proactive in cultivating positive financial, environmental and social benefits. Impact investing fills the gap between philanthropy and the traditional business-as-usual model of the for-profit sector. If you think about the hierarchy of available capital resources, you will quickly realize that charitable money is the most valuable because people can afford to give away so much of it regardless of the end result.

This situation has been a limiting factor for the expansion of most non-profit organizations and NGOs. The problems they are trying to solve are enormous, but their resources are limited. However, if those same people were to invest in these organizations on a commercial basis and receive a decent return on their investment, the number of dollars invested would increase substantially. This is where social investing comes in - it is the intersection of value and profit.

Capital markets are arguably the most powerful force driving change on the planet (both positive and negative), and if you want to produce large-scale, ever-changing economic development, then you must be able to invest commercially in businesses that who are working to bring about such changes. In fact, other people around the world feel the same way. Since 2008, the financial sector as a whole has been undergoing optimization processes, while social investment has been growing rapidly.

For such businesses and investors who are interested in investing in accordance with their values, now is the best time. A 2010 report prepared by the Rockefeller Foundation and The Monitor Consulting Group noted that " Within 10 years, impact investing in just five sectors: housing, rural water, maternal health, primary education and financial services has the potential to grow invested capital from $400 billion to $1 trillion. and profit growth from $163 billion to $667 billion».

The infrastructure for the impact investing sector has already been created in the United States. New forms of legal entities, such as non-profit organizations or low-income limited liability companies, are aimed at protecting the financial interests of the investor and realizing the social goals of the enterprise.

An apparatus for measuring social value and social impact is invented; new tax policies that take into account the social benefits derived from socially responsible corporations, and “social” capital markets have been created to better finance socially oriented business activities.

Special sources of financing are being developed. Socially responsible stock exchanges are already under development in at least six countries, and Asia's first impact exchange recently opened in Singapore. I will add that highly specialized socially responsible firms offer a wide range of equity and venture funds in different sectors and with a variety of return strategies.

These include bond and loan guarantees, as well as combined for-profit and non-profit funds. Impact investing is well on its way to becoming its own asset class.

Today, perhaps the most well-known impact investing is microfinance. Despite the fact that there has been a lot of disagreement over the procedure for issuing loans and inflated interest rates, microloans have improved the lives of millions of the poorest people on the planet over the past twenty years.

While there are many inspiring stories from around the world, including the most developed countries in the OECD (Organization for Economic Co-operation and Development), the opportunities for lifelong tourists in emerging markets covered by Unbound seem to be the easiest to benefit from immediately .

Since these markets require almost everything, it is very cheap to start a business here. It is clear that the risks are different. An investor or business owner is forced to take into account: different values ​​in work, level of education, laws, level of technological development and differences in the provision of business assistance by governments of different countries. Although impact investing is a complex task, today we can already talk about significant successes in this area.

Some examples

An agricultural fund that provides low-interest capital to farmers in Africa receives a return on its investment in the form of farm produce at a reduced price. Who knows how to sell goods in the shortest possible time are African farmers. Due to a severe shortage of warehouses to store products, they are forced to sell the harvest in full directly on the day of harvest.

Today the government is trying to attract investment for the construction of warehouses and agricultural supermarkets. This will give farmers the opportunity to plan their business. Plus, the ability to store crops in a warehouse will provide flexibility when selling products and allow you to negotiate the best price. In addition to government capital, farmers receive technical and agricultural assistance to improve their crops.

The impact investing course is one of the most popular in colleges in the US and Europe today. This popularity is by no means limited to students. Banker Morgan (JPMorgan Chase & Co) decided to launch a social and financial unit at the bank, and after just a week, he received more than 1,000 calls and emails from other banks who wanted to join! And this despite the fact that impact investing is not considered the easiest thing to do.

I agree, I am also excited about impact investing. After all, this program appeals more to the human spirit and experience than more traditional business models.

As a result, you will receive two products at once: financial benefit and great satisfaction from the feeling that you are doing something really important.

Today, impact investing is beginning to have an impact on traditional investing. A large number of large investment banks invest in socially oriented funds. For example, this is the Carlyle Group - one of the largest investment funds, managing assets worth more than $147 billion.

Is impact investing not only a source of investing with huge returns, but also a driving force for a better future?

As the famous Canadian hockey player Wayne Gretzky once said: “ I'm racing to where the puck will be, not where it was."! We can build our lives in the same way. We ourselves are free to choose: to work in the world as it is, or to change it the way we want.