We were delighted to welcome a large virtual audience to our second Winter Talk on 24th November.
Our ‘Investing for Impact’ evening was hosted by Alexander Hoare who in 2010 started a portfolio of impact investments in the Golden Bottle Trust. In 2016, he co-founded Snowball, a diversified investment fund where every investment achieves social impact as well as financial returns.
While issues such as environmental degradation and social inequalities are often laid at the door of capitalism, Alexander shared a vision where ‘capitalism may hold the answer, with social investment unleashing further innovation and progress for mankind.’
Our guest speakers were Daniela Barone Soares, CEO of Snowball, and Daniel Brewer, CEO of Resonance, an impact investment company with a mission to connect capital with social enterprise.
Daniela presented the case for a radically changed mindset: ‘We need,’ she said, ‘to change the approach that puts people and planet at the service of financial returns and, instead, put finance at the service of people and planet.’
For Daniela, fulfilling fiduciary duty – the obligation to act in the best interest of another party – is not necessarily synonymous with maximising profit at any cost: ‘In a 2019 UK survey, 70 % of respondents said that, given the chance, they would prefer to invest in opportunities that at least avoid harm,’ she pointed out. ‘So I think it’s time for us to think about what ‘fiduciary duty’ really means. Are we, for example, comfortable funding companies which are exacerbating the climate emergency and leaving this enormous bill for our children and grandchildren to pay? ‘
‘There is’, she went on, ‘a crazy contradiction embedded in the system we have now. You may have foundations where 5% of earnings is spent on grants to reduce pollution, while 95% is invested in companies who are themselves polluting the environment. This contradiction is not lost on people. Maximising returns by any means possible so that you have more to give away at a later date is not, I think, a model young people are buying into anymore.’
For Daniel Brewer, whose company has particular expertise in working with homelessness charities, the solution lies in providing risk-adjusted return to investors:
‘There are something like 80,000 families in temporary accommodation across the UK and 50,000 of those are in London. Resonance initially partnered with St Mungo’s, and has since expanded to work with a number of other charities working to support homeless people. So our social housing funds have an ability to scale and an ability to attract all kinds of investors.’
‘It is rare,’ said Daniel, ‘for this kind of opportunity to deliver glitteringly high returns, but there are mechanisms for reducing the risk. If you look at one of our property funds - on the surface it looks like a private rental-sector fund, but we do a few things differently. We provide guaranteed rents, so the registered providers who lease our properties pay the rent whether or not those houses are occupied. There’s no void or maintenance risk to our investors because that side of things is managed by the homeless charity. And it’s providing a real opportunity for homeless individuals and families to stabilise their lives, get back on their feet and reengage with society.’
Both Daniel and Daniela reported significant developments in impact measuring and reporting and were greatly encouraged by the thriving UK ‘impact ecosystem’ that has grown up in the last 20 years. Our virtual audience was no less excited and engaged by the ideas put forward and a most productive discussion ensued – an inspiring reminder of the collective firepower of the C. Hoare & Co. community.