This year’s Fi Forum in Madrid focused on the need to accelerate the further mobilisation of capital into emerging markets, the importance of the ‘human factor’, and the crucial role of families when it comes to impact investing.
Over 500 delegates gathered in Madrid earlier this month for the 2023 Fi Impact Investing Forum organised by the Social Nest Foundation.
The foundation’s founder and president Margarita Albors opened the gathering calling for closer collaboration among all stakeholders in the impact investing ecosystem. “It is important for investors, companies, startups, civil society and public administrations to work together to meet the challenges facing humanity,” she said.
The event was attended by representatives of sector organisations, family offices, entrepreneurs and impact investors from all around the world, at a time when Spain is seeing an increased interest in impact investing. The need for accelerating mobilisation of capital into Africa and Latin America, as well as the importance of the human factor in impact investing were key topics at debate.
‘Warriors of change’
Speaking at one of the panel discussions Ging Ledesma, director of strategy and sustainable impact at Oikocredit International, called for delegates to become “warriors of change”.
“Impact investing is about exactly that: concern for people, for individuals, for how they are doing and what they need. No matter the age, who you are or where you come from, we are all equal,” she said.
Nico Blaauw, partner at Goodwell, stressed impact investing is all about “people, about hope and goals.” He said: “The goal is not to choose between either social or economic concerns, but rather to fight for them both, and that’s where investors come in. We have the opportunity to change things”.
‘Don’t wait for your bankers to be ready’
During a panel on the role impact investing as a driver of systemic change, Albors stressed the importance of targeting the root causes of the many challenges facing society.
“When we are talking about systemic change in the impact sector, we are talking about transforming social, economic and political systems to address the social and environmental challenges that we are facing,” she said.
Pablo Valencia, partner at impact investor Q Impact, urged the sector to commit to mobilise more capital into impact investing, from the current 1% of total funds under management, to the at last the 10% suggested by impact investing pioneer Sir Ronald Cohen as needed to reach tipping point.
“My call to action would be to make sure that we all, as individual or professional investors, at least make sure that we allocate that 10% to impact investments. Whatever the strategy, whatever the risk, but let’s make sure that 10% of our portfolios are put to work into solutions [to societal challenges],” Valencia said.
Tim Radjy, chairman of Alphamundi, noted that fifteen years ago the weight of emerging market economies in relation to global GDP was “insignificant” but by next year “they are expected to be nearly half”. He added: “If someone gets advised not to invest in emerging economies because of the risks they supposedly entail, they should, quite simply, get a new advisor.”
Radjy warned potential impact investors against waiting for their bankers to bring impact investing solutions to them. “If you are putting yourself in the universe that your bank understands, you are putting yourself in a very small box.” He added: “Don’t wait for your bankers to be ready to help you on this journey. Go to your peers, go to investment funds which have been doing [impact investing] for a long time and collaborate.”
Roberta Bosurgi, CEO of the EVPA, discussed catalytic impact with her Latin American counterpart Carolina Suarez, CEO of Latimpacto.
“It is not about how much you invest but about how do you drive the impact,” said Bosurgi. “It is about how you are going to catalyse other investors, other capacity-builders and stakeholders of the ecosystem to generate impact.”
Bosurgi mentioned the role of grants and philanthropic capital as a catalyst for other investors to move in. She referred to the UK’s Women in Safe Homes fund, co-manage by Resonance and Patron Capital, which received a £3.7m donation from the MacArthur Foundation and it is now around £20m and hopes to reach £100m eventually. “What the MacArthur Foundation did in the beginning was catalytic because it mobilised other investors.”
She also spoke about public funding and in particular the role of the European Commission and EU initiatives such as the European Investment Fund (EIF). “The EU does also do direct funding for impact. For the last two years the EVPA has been a partner of the EU in building funds in neighbouring regions, using grants that get deployed into local funds which are having a catalytic effect bringing other investors in.”
Latimpacto’s Carolina Suárez added that, unfortunately, in Latin America public funding for impact is still a challenge. “For us is, it is a challenge to work with the current government [of Mexico]. What we are promoting instead is working with local governments that are more keen to support initiatives.”