Ideals and Reality influence investment

Updated: October 20, 2015  Views: 68

Special correspondent Gu away

Severe turbulence in the global stock markets, the major economies troubled background, a new area of investment - 'influence investment (Impact Investing' the market performance is particularly prominent.

June this year, 'global influence investment network' has released the latest research report >> << influence investment benchmark report that 'impact investing' can get an average 6.9 percent rate of return, the investment involved in the field of inclusive finance, employment development , green home, etc. Those funds operating performance in the emerging markets the best rate of return on average 9.1%, while the fund for Africa can even reach 9.7 percent.

Influence the investment mix of the profit demands and the demands of public service value of capital in the global investment market is booming, the impact on people in solving social problems of many attitudes and behavior report global influence network investment indicates that investment even not necessarily because of their social and economic interests at the expense.

Rise and optimistic forecasts of impact investing

The rise of the influence of investment is the result of multiple forces to jointly promote. From the perspective of the capital, on the one hand there is a socially responsible investors and investment institutions increased, on the other hand, many social problems do exist opportunities to use market mechanisms to solve From the perspective of public interest, the traditional way of donation, are often more concerned about public welfare project without attention to the development of the organization itself, but also tend to ignore helped objects dignity, fueling their dependence from the government's point of view, especially in the After the 2008 global financial crisis, Britain and other governments facing severe public spending crunch, began to consider innovative ways to encourage the private sector to participate in public services among.

Today, fair trade organizations from Central and South America to Africa's agricultural cooperatives, from US solar cell factory to Nepal saving computer distribution system, can see the influence of the figure of investment in China by the Cultural and Education Section of the British Embassy launched Chinese social investment platform this year has been in operation for three years in a row, the platform encompasses almost the influence of China's main investment institutions, investment amount and also the applications received every year.

<< New York Times >> Investment in an article in the influential referred to as 'a new kind of hybrid of charity and private capital.' And Sir Ronald Cohen 'father of Venture Capital' European opinion, influence investment may 'one of the most powerful innovation in the sector since the tax incentives were introduced Philanthropy appear.'

On the one hand, the influence of investment acknowledge this fact: this society, some people are willing to donate for free, while others want to at least be able to return to the present, and some can even much hope that we can have some return, even if it is lower than the market level return appears influential investment enables the public interest sector can get more funding, which make up in order to solve social problems require huge funding gap.

On the other hand, the influence of investment can also play a role in the risk of investing in a number of areas relating to people's livelihood. Commercial venture capitalists prefer to invest in a social software, and more reluctant to invest in those areas of social values, and this is is the focus of attention of many influential investment. I have introduced the world's leading investment institutions Acumen influence of 'patient capital' approach to promote the popularization of biomass power plants in rural India. Again, the Bill & Melinda Gates Foundation, invested $ 10 million in 2011, in the form of equity investments of Liquidia Technologies company, help it to develop and commercialize a vaccine for the prevention of infectious diseases.

Date of birth from the influence of investment, a lot of research and investment institutions to hold it in a very optimistic in 2009, Monitor consulting firm released a research report said that in the next 5 - 10 years, investment will at least influence to reach $ 500 billion in size. In 2010, the Rockefeller Foundation, established charitable organization and one of the largest institutional investors JPMorgan jointly issued a report will influence investment formally defined as a new type of investment assets, and predicted In the next 10 years, only in the provision of housing, drinking water, women's health, primary education, and financial services for the population of the annual income of $ 3,000 or less five areas can occur 400 to 1000 billion US dollars of investment .2012 years, Boston Consulting Group and the UK 'big social capital' Post << first billion: Social Investment demand forecasting >>, forecast 'UK Social Investment demand will reach 750 million pounds in 2015, in 2016 to reach 1 billion pounds 'in 2014, the UK investment community working group in its report << impact investing: Market invisible core >> made in a more bold prediction: the future of British influence investment sources will be more international, investment It will reach 1 trillion.

Reality: will not become a mainstream investment community

However, the reality is quite different. In the influence of British investment in the most developed, the data show market growth impact investing is actually very slow. According to the annual report large social capital, influence actually occurred in 2013 in the UK to invest only 19 pens, value £ 47.9 million, of which 13.1 million investment was even later withdrawn.

According << 2015 Annual JPMorgan and global influence investment network recently released report >> influence investment, the most pressing issue in this area (and two years ago, as is the lack of similar studies for the investments, as well as the lack of suitable and other investment, and the lack of professionals, lack of impact assessment methodologies and data issues also seriously restrict the development of this field. At the same time, the public welfare of such a combination of capital and still have misgivings about, only a few people are willing to participate.

Faced with this situation, the influence of institutional investors began to adjust their expectations and strategies.

And different commercial venture, influence investment can be described as typical 'high-risk, low income, slow' by Acumen founder Ms. Jacqueline Novogratz words:. 'This is not 5--7 years can be effective thing children, it takes longer. 'As for the return of a few years ago most influential investors still optimistic and the market is expected to get at least a similar rate of return. Today, influential investors generally increasing emphasis on economic and social balance between benefits.

Meanwhile, some influential institutional investors are changing the past only investment mature institutions, 'pinch point' mode, begin to focus on the urgent need to support it is difficult to get support for the start-up of agencies who provide seed money and capacity building support. In China social investment platform, for example, last year only one investment institutions expressed support for start-up period of social entrepreneurship organization. This year, two investment institutions have chosen to support the start-up of the agency, as well as two other investment institutions founded on social a startup incubator.

Acumen initiated by the 'patient capital' model of social entrepreneurship is more focused on helping organizations across the 'pioneer fault.' These institutions often have an innovative solutions to specific social issues, and has been proven technically feasible, but because mode and institutions are still in the early, high risk, low income and a long payback period, so it is difficult to get mainstream investment to help it grow and develop. In this case, the 'patient' influence investment intervention can play a similar venture capital role in helping these organizations span from the early start to the gap between the high-speed development period, but also through his 'endorsement' to attract and encourage more resources side to join them.

Focus to China's influence investment, I very much agree with 'China's influence fund' Zhang Tao, founder of view: the influence of the investment in the foreseeable future is not destined to become a mainstream investment community, its role should be more a social enterprise or a pre- the process of 'catalytic capital (catalytic capital', through its 'blending' to pry the confidence and participation of mainstream capital.

Nobel peace prize laureate, pioneer of microcredit model, Dr. Yunus once said: 'the world today many issues are resolved, it is due to the understanding of the spirit of capitalism too narrowly behind this narrow understanding of. actually implied that narrow understanding of human nature, only to see the people have a job at calculating side, but did not see human nature as well as a richer content. '

So, when we talk about the influence of investments, in addition to changing the world from the grand narrative to consider its significance, but also able to return to our own. On thinking and practice in this area, it is still in the exploration and practice our humanity those richer content. (Editing Yanxia)


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