G8 report sheds light on the process of building the impact investing market

Monday, September 15, 2014

SIR RONALD COHEN is not a man to bet against lightly. He was a pioneer of the European venture-capital and private-equity industries before turning his attention to “impact investment”, a way of investing that targets both financial returns and measurable social benefits. He was involved in the birth of the world’s first social impact bond (SIB), a financial instrument that is using private capital to fund a prisoner-rehabilitation scheme in the English city of Peterborough, and which will repay investors through the government savings it enables. Sir Ronald was also the first chairman of Big Society Capital, a British financial intermediary designed to catalyse the market for impact investment.

His latest move is to present the concept of impact investment to the wider world, by chairing a G8 task force on the issue set up last year. In a report published on September 15th, it delivered its recommendations on how to push forward a market that is currently fairly small but is now starting to attract lots of interest. That attention stems from a confluence of factors: governments keen to be more efficient in their spending, rising investor interest in solving social problems while making money, and concrete examples—like SIBs, which have attracted $100m in investment to date—that people can latch on to.

Source: The Economist (link opens in a new window)

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Entrepreneurship
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impact investing