Working moms are changing the workplace for the better, and it’s time to celebrate and share that and look at how we can keep improving work life balance. That’s why I teamed up with a national financial television show to start a new weekly segment on Women & Work, which I will also be sharing in my blog.
The first episode takes a look at how women are influencing the growing impact investing arena, which saw assets double from 2017 to 2018. More than $228 billion is now allocated to companies devoted to both making a profit and improving society through social good or environmental stewardship. The case foundation says women are a driving force leading this movement.
“You don’t have to make money, then do good. You can make money while you’re doing good,” said Jessica Droste Yagan, CEO of Impact Engine.
Yagan recently joined a discussion at SeedCon in Chicago, a conference presented by the University of Chicago Booth School of Business. Panelists agreed with Yagan that there’s never been a better time to be a social entrepreneur.
“There’s a broader array of types of financing available to you I think as an impact company because there are a handful of foundations and impact-first family offices that are saying, I’m willing to invest at sort of cheaper capital or at different terms because I really really want this impact,” Yagan said.
The industry insiders also said more investments are delivering positive social impact along with competitive financial returns.
“Whether you’re investing in a fund that says it’s an impact fund — there are some that will say I’m market rate; I can compete with any other fund out there that’s not impact — and there are others that’ll say, I’m intentionally taking less of a financial return because I believe I’m having more impact, and here’s why,” Yagan noted.
Bank of Montreal’s Wealth Institute says women control more than half of American personal wealth — about $14 trillion — and a study by Calvert Investments found at least 90 percent of affluent women ranked “helping others” and “environmental responsibility” as important.
“Our fund focuses on investing in companies with products that improve education, health, economic empowerment and environmental sustainability. And the reason we’ve chosen those is they are areas where you can have big impact but those are also markets where there’s a lot of demand, and we can actually build real competitive businesses,” Yagan explained.
“In our case we support business owners transitioning to their employees and being able to sell part or all of their company to their employees,” said Torana Group Founder/Managing Director Malini Ram Moraghan.
Fund managers say the interest in impact investing has been growing, and the University of Chicago Booth School of Business responded in recent years by creating a separate center for social sector innovation.
“This is still a very new industry, and I think particularly on the mid-market, later-stage growth equity side there’s a lot happening in the impact investing ecosystem,” said Will Colegrove, senior associate director of the Rustandy Center for Social Sector Innovation.
The panelists said investors expect to see proof of financial and impact performance — especially as big players jump in, like the billion-dollar impact funds from Apollo Global Management, KKR & Co. and TPG Capital.
“Impact investment is a space that’s coagulating and forming still. There are lots of funds opening up. More money coming into a space doesn’t necessarily mean it’s functioning well. There’s still a lot of infrastructure to build out,” said Moraghan.
“The statistics show that younger generation women in particular continue leading the charge on this, saying that we’re looking again both from a career perspective — we want to see that what we’re doing is actually making a difference in the world — and also on the investment side — we want to see that the companies we’re investing in, whether through our 401k or through our personal accounts, are having these returns as well,” said Colegrove.
“I think in the short term what we’re seeing is more demand for this type of product, more demand for these types of companies. It’s still small, but it’s growing quickly. So we’re seeing a lot of movement in fund offerings,” Yagan said.
Market Watch says sustainable investing that considers environmental, social and corporate governance (ESG) criteria now represents 25 percent of the $47 trillion in U.S. assets under management, and demand for such impact continues to rise.
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