Social Investment = Money + Collaboration Squared

I enjoyed the conference on Social Impact Investment yesterday, organised by our friends Angel News. Gregg Davis’ (Barclays) presentation was fascinating and his research demonstrates that there is a real appetite for social impact investing among investors, but that we need to make it clear, simple and easy for them. There’s also a wide range of potential investments, although (perhaps unsurprisingly) much more debt than equity options available.

There was a consensus that tax reliefs were vital to encourage investment in an area where the expectation seems to be that market level returns are on offer (the reality is that they are not!). I know from work IP have been doing that there are a number of investment providers waiting on the sidelines, ready to launch products once the limit on investment into an individual company is lifted to £5m annually – so lets hope that happens soon. My feeling is that advisers and retail investors will want to see some choice and a market in these products before they take the plunge in any great numbers. Kudos to the providers who have stepped up and led the way already.

Perhaps the most interesting thought of the day was the suggestion that social impact investments could be a way to encourage investors out of cash, which they historically overweight, and into something productive.

Finally, nobody on stage or in the audience wanted to state how much people should invest in this area – either in actual or percentage terms. The mantra was “it depends upon the client and their individual circumstances”, which is pretty much standard in financial services (and is hard coded into the regulations for advisers). Well, I’m going to go against the grain. Why not pick a number and encourage everybody to do it, like the Five-a-Day campaign for eating fresh fruit and veg? 5% of every portfolio in the land allocated to social impact investments would make a big difference!