Conference Presentation, Panel
Impact Investing: Where Are the Deals?
Milken InstituteAmit Bouri, John Chiang, Tony Davis, Giles Gunesekera, Deval Patrick, James Gifford, Shiran
- GIN membership is projected to exceed 200 organizations across 32 countries with continued growth.
- TIAA Global Asset Management intends to refresh its 2012-2013 approach to focus on affordable housing, inclusive finance, and community economic development, leveraging real estate partnerships to navigate government programs.
- The Global Impact Initiative plans to develop bespoke solutions for Australasian institutional and retirement clients, aiming to engage global fund managers and construct products within equities, bonds, and real estate rather than small portfolio sleeves.
- The Australian government is expected to raise compulsory retirement savings from 9% to 15% over the next seven to eight years, a shift anticipated to drive rapid scale in impact investing among large pension plans.
- A new actively managed strategy focused on women and girls, expected to be the world's first of its kind, will launch later this year with an allocation of approximately 75% to developed markets and an initial 25% to emerging markets.
- Bain Capital expects Limited Partners to drive impact investing direction through demand, noting over 100 opportunities have been received since fundraising began with about a dozen under deep consideration.
- CalPERS and CalSTRS will seek to maximize returns for their defined benefit plans, which hold approximately $280 billion and $180 billion respectively, while California seeks to move billions from its short-term portfolio into community banks for affordable housing and clean projects.
- The State of California expects to require infrastructure that functions as water conveyance systems tied to autonomous vehicle technology due to water shortages, with anticipated legislative changes to help catapult returns for affordable housing developers.
- The Inherent Group plans to leverage family office capital without a fixed tenor to identify transactions in health, wellness, education, and the environment, targeting businesses with market caps between $1 billion and $3 billion.
- Millennial inheritance of approximately $40 trillion over the next 30 to 50 years is expected to create a guaranteed buyer base for impact investing, while women taking over portfolios in that timeframe will influence the landscape.
- Deal sizes of $150 million to $200 million annually will require high documentation standards to pass established investment committee processes, and panelists expect to introduce projects seeking $30 million to $50 million in funding to international investors.
- The Inherent Group anticipates synergies between its foundation and for-profit sides by using the same analysts and program officers to manage both, applying for-profit loan concepts to not-for-profit models.
- A centralized municipal green bond platform white paper is expected to be disseminated within the next two to three months, followed by a national gathering to mature the market.
- Latin America and Asia are expected to grow dramatically in green spaces, necessitating more rapid implementation of changes in the United States to catch up.
- Impact investing concepts are expected to shift from screening out bad companies to actively pursuing positive impact, potentially attracting capital that might otherwise remain in philanthropy if measurement systems clarify social returns.
- Confusion between concessionary capital and market-rate products risks setting the industry back, necessitating harmonized terminology and refreshed policies to convert interest into activity.
- CRA money flooding the U.S. market is expected to continue challenging institutional investors competing with CDFIs, while tax incentives remain necessary for deep affordable housing projects to exist.
- Managing financial bottom lines alone is expected to fail long-term without addressing environmental, social, or employee issues, and sustainable factors will increasingly become revenue opportunities aiding workforce attraction.