Tuesday, July 9, 2013

My question, merely rephrased, is still open - IRR v/s Impact Investing: Do financial institutions necessarily go through this dilemma?

So I now can save some breath by saying 'Impact investing' whenever I have something to say about social impact of investments - that still doesn't mean I get the whole picture now! 

Below is my comment on a recent article on Forbes titled "Pierre Omidyar, Steve Case And Mike Milken On The BusinessCase For Impact Investing"

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Comment:

Earlier in Jan 2013 I posted a poser on my blog titled "IRR v/s Social Impact: Do financial institutions necessarily go throughthis dilemma?"

Even as I am still unclear how social-impact can coexist with bang-for-the-buck at the macro level (~LPs), I see a definite hope in the approach being pursued by Omidyar Network, which made a great start just by terming itself as "a philanthropic investment firm' – The document “From the Field: Lessons Learned in Impact Investing” goes on to showcase how ON takes this moniker seriously – Bravo!!

From all I could see, ON is still an investment firm that’s funded (largely) by its philanthropic founders & there is no ‘raising of fund from LPs’ involved in this unlike most VC/ PE firms that dabble in similar volumes of investments/ portfolio.

That brings me back this intriguing question of how the likes of JPM measure their social impact? – I am sure I am missing something here.


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