Impact Investing: Combining Finance and Philanthropy to Transform Latin America
A low-cost clinic in Monterrey for people with diabetes. A system that gives low-income students financial credit in order to receive a private university education. Low-cost, ready-made houses for people with little income in marginalized rural communities. All of these scenarios have been created by companies currently improving conditions for people in Latin America while also creating profits. This concept – that companies can create profits while doing good in the world – is at the heart of the growing impact investing field.
The number of private equity and venture capital funds focused on impact investing has risen quickly in the last years, and a 2009 report from the Monitor Group, estimated the impact investing industry could grow from its present $50 billion or so in assets to $500 billion in assets within the next decade.
The last several years have been catalytic in the development of the impact investment sector in Latin America, as emerging markets have become key players in the financial services arena. Many Latin American economies have been more resilient during the current world economic recession than the US or most European countries. In this climate, many venture capital funds and private equity groups have been created with a focus on impact investing, including Adobe Capital, Bamboo Capital and Vox Capital. Business accelerators have formed with an exclusive focus on ‘impact’ projects and working to ready these ‘world changing entrepreneurs’ for investment, such as New Ventures and Agora Partnerships. Banks like Banorte have started working on the process of including impact investing within their private banking practices. Foundations such as AVINA Foundation and Halloran Philanthropies have diversified their donation approach to dedicate part of their money to impact investing. Exclusive, actively engaged angel investor groups like Toniic Mexico have been formed to promote co-investments between local and international investors that also are interested in impact projects in Latin America.
“There are moments in history when the needs of an age prompt lasting, positive innovation in finance – from ideas as big as the invention of money, to the creation of new institutions such as banks and insurance firms, to the development of new products and services such as mortages, pensions, and mutual funds,” says the 2009 Monitor Institute report Impact investing is one of these world-changing innovations, and now is truly an innovative time for impact investing in Latin America, as ideas turn into action.
The second edition of the Latin American Impact Investment Forum will take place this Feb. 13, 14, and 15 in Mérida, Mexico. Entrepreneurs, angel investors, private equity groups, venture capital funds, banks, business accelerators, foundations, academia, and government representatives from across Latin America will be in attendance. Join us in transforming the way we do business and philanthropy in the region. Together we will develop the initiatives that will be responsable for an even more accelerated growth in the Latin American impact investment sector.
The Latin Impact Impact Investment Forum is organized by New Ventures México, and will gather the main institutions that are promoting impact investment throughout the region such as Avina, Potencia Ventures, Halloran Philanthropies, Artemisia, FUNDEMEX, US- Mexico Foundation, Promotora Social México, Inter-American Development Bank. Nacional Monte de Piedad and FEMSA.