How did you get into Impact Investing?

I’ve spent the vast majority of my career in mid-market private equity in the UK. I did that as a full-time role until I stepped down in 2015 where I pursued a portfolio career. My engagement with impact really started around 20 years ago, when the fund I was working for worked with ‘The Big Issue’ to attempt to raise an impact fund, which would’ve been the first impact fund in Europe and possibly the world. We worked hard at it, but that ultimately failed to raise sufficient funds and we didn’t get to close. Looking back we were too early and ahead of our time, but the business I was working for morphed into ‘ClearlySo’ which is now one of the leading investment impact funds within the UK. I currently have three roles. I chair the Palatine impact fund, which is a private equity fund purely focused on backing businesses that have a positive and or social impact. I chair Estio, a technology apprenticeship training business that is backed by the Palatine impact fund. I funnily enough also chair the investment committee for Big Issue Invest, the fund management arm for Big Issue. It’s come back in full circle. 20 years ago I was engaging with Big Issue and now I’m working with them again and helping them build their asset management business within that space.‍

How do you feel the impact investing space has changed during the course of the COVID-19 pandemic?‍

There was already really good momentum within the impact space ahead of the pandemic, but I think what the pandemic has done is caused everyone to pause, and think about a whole host of things whether it’s social injustice or damage to the environment, and all the things that maybe have been contributing factors to the spread of COVID. My utopia would be where every investment decision is based on risk, reward and impact, but we aren’t there yet. Surveys are produced left, right and centre about how consumers and their buying decisions, looking through what a business does, understanding its footprints, its impact, its purpose, and consumers are more likely to buy from those that have a purpose. So I believe that there is a positive outcome as a result of the pandemic, in its acceleration of the impact of everything that we do. ‍

How has the world of impact investing changed over the past two decades?‍

It has truly gained more recognition. People understood philanthropy, and there was some awareness of green issues, but the exposure we have now is just a quantum difference. Venture philanthropy didn’t exist, profit with purpose wasn’t a phrase talked about, there were very few impactful companies of scale. The SDGs weren’t about back then, we talk about them now but they weren’t even thought about. If you look at the huge volume of capital bought into impact since then, it’s phenomenal. The palatine fund could not have deployed £100m of capital 20 years ago, it’s not a big fund today but it would’ve been a huge fund back then. We are well on our way to deploying the first fund this year and will be raising our second fund later this year. That’s just a huge change. it's anecdotal but I always find it amusing… I’m a fan of a TV show called Billions, and in the most recent series they launch an impact fund. I find it phenomenal that impact funds can get into the world of fiction and are being talked about in popular culture. If that was on TV 20 years ago, it wouldn’t have resonated or been understood. It just makes me smile. 20 years isn’t a long time, but the market has just gained recognition. ‍

Purpose washing is now a marketing trend. Do you feel like this helps accelerate the idea of true impact-driven business, or hinders it? ‍

It’s positive in one respect as much as brands are thinking about their impact and recognise the need to see if they have a credible purpose. I’m not overly concerned about purpose washing or greenwashing because I think that if it’s done in a really inappropriate way then it will be called out. It could create some noise or some negative connotations around the sector, but it doesn’t worry me as something that would be damaging as those that do have a genuine purpose will be seen as legitimate and those who don’t will be found out and regret the day they ever tried to go down that route. ‍

What are some key qualities that you look for in potential impact investments? ‍

Some of the old qualities still apply. It’s down to the management and the people that come up with the idea and are prepared to execute on it. That’s critical. If you can surround yourself with a great team, and also tap into more experienced people that can come and join you on your board, then that would back you up hugely. I also think it’s important to find something that is scalable, something that will take time to scale and needs capital to scale it. If you surround yourself with high-quality people it’ll give you the best chance of success.