A social enterprise behind the creation of the first sign language dictionary in the world and another that aims to tackle global food security by helping smallholders have one thing in common. They are a new breed of business entities with unproven business models that would be out of the reach of much-needed philanthropic dollars if not for the emergence of impact investing.
Hong Kong-based family investment group Carlton Mansfield Capital is one of the firms that invest in this type of business. “There has been a major shift in the global investment landscape — everyone is looking to be more conscious of the type of investments they make and how they can be more sustainable. This played a part in the head office’s decision to explore philanthropy, either by way of a foundation or the next best thing, which is closer to actual investing, but with a focus on impact,” says executive director Durrie Hassan.
“Some of the earlier opportunities in China revolved around technology intersecting with the philanthropic sector. Setting up a foundation for the head office has always been a long-term goal, so that prompted the decision to set up the impact investment division. The division helps diversify our portfolio and naturally, this allows us to assess different exciting opportunities.
This further enables businesses and social enterprises that are conscious about the work they are doing. Also, I figured that it was a better way to deploy our capital.”
Impact investing has evolved from being a subset of socially responsible investing and environmental, social and governance (ESG) investing, where the strategies go beyond avoiding sin stocks to focusing on positive outcomes for the environment or community. By combining traditional grant-making approaches and leveraging the power of markets, impact investing is an alternative to philanthropists who reject the notion that there is a binary choice between investing for profit and giving money to a social cause.
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