In a series of three articles, Scott Greenhalgh*, former executive chair of Bridges Evergreen Holdings, will share his thoughts on the landscape for impact investing in the UK. In this third and final article, Scott looks in more depth at the distinction between finance-first and impact-first equity investing.

* See bottom for more on the author

Start the series here

Impact Investing and the Three Dimensions of Capital

In previous articles, we have defined impact investing as: “investments made into companies, organisations and funds with the intention to generate positive, measurable social and environmental impact alongside a financial return”¹. We have also touched on the distinction between finance-first and impact-first investment strategies.

This article describes how different impact fund managers prioritise issues of impact, risk and return (the three dimensions of capital). It also explores impact-related themes a potential investor might wish to explore, with a company or impact fund manager, before deciding whether or not to invest.

The Spectrum of Capital shown below²  places all investment on a continuum between “traditional” investments at one end (those that seek to maximise risk-adjusted returns with no consideration of wider social or environmental factors) and philanthropy (that seeks only impact and no financial return). This approach positions ethical, sustainable and impact investing on that continuum and allows us to distinguish between impact investing that is finance-first, meaning it aims to deliver impact with no sacrifice of market-rate financial returns, and impact-first, where the investor accepts lower, risk-adjusted returns.

Figure 1: Impact Investing Institute’s Spectrum of Capital.

Finance First

A number of venture capital and private equity funds take a finance-first approach to impact investing. Such funds invest in businesses and aim to achieve market-rate financial returns for the investor at the same time as achieving positive social and/or environmental outcomes. Examples in the UK mid-market include Palatine Impact and Bridges Sustainable Growth Funds. There are an increasing number of impact funds offered by the large investment firms such as TPG, KKR and Bain Capital. There are also a number of “tech for good” early-stage impact investors like Mustard Seed, for example. 

The alignment between commercial and impact success is often referred to as lockstep in the impact investing industry. By way of a simple example, a learning support business that provides high-quality, educational materials to schools might be considered to offer lockstep. Put simply, the more it sells to schools, the more children benefit from the materials. In this way, commercial growth is aligned with greater social benefits. The lockstep argument allows businesses to maximise profits, and investors to maximise returns, while achieving positive societal and/or environmental impact.

The finance-first approach applies mainly to profit with purpose private company investing. A 2017 Stanford paper looked at the impact/return profile of investing in social enterprises and found that high-impact social enterprises (as opposed to for-profit businesses), whether in emerging or developed markets, were unlikely to generate more than low single digit financial returns.³

The EVPA characterises finance-first investors as investing with impact. In this definition, the investor will prioritise financial return over impact at each stage of the investment cycle. Therefore, from initial screening through to decisions as to which buyer should be selected on exit, the key metric for the investor is to maximise the financial return.

To return to the school learning materials example above, a finance-first investor would favour private school customers if these paid higher prices than state school ones. If we assume more state school pupils are likely to come from less advantaged households, then the finance-first approach leads to some trade-off in the amount of impact. 

A finance-first approach can be described as “maximising” equity return, consistent with mainstream private equity and venture capital investing. In a 10-year fund structure, a five-year investment horizon is typical. Two consequences of this are worth highlighting. First, the investor will be concerned to drive fast growth from the outset of the investment and second, where possible, to use leverage in order to reach the desired financial return.

As I set out in the next section, there are increasing concerns about potential adverse consequences of this investment approach, for example in the provision of public services by the private sector.

Impact First

Impact-first investors focus on achieving a “sufficient” rather than a “maximised” financial return. They therefore also give equal or greater weighting to impact as to risk and return considerations.

What constitutes a sufficient return and how sufficient is defined will be subjective and will vary. For example, the fund I ran aimed for, and was achieving, a 9% net return to investors per annum. At the same time, we took the view that the level of return should not involve having to compromise on the level of positive impact. 

Let me give an example. In November 2020, the Children’s Commissioner published a report on private provision of children’s care services in England, raising concerns about the high profits and high debt levels of some private-equity owned companies providing these public services.⁴

By way of context, there are some 74,000 looked-after children in England, a number that has risen by over 20% in the last decade. This increase in “need” has mostly been provided by private, for-profit business and the private sector now accounts for some 35% of total provision, with local authorities and charities providing the balance. 

A number of the larger foster and residential care providers are private equity owned. Private equity funds typically target financial returns on equity above 20% per annum. Achieving these returns requires some combination of tight cost control, rapid “buy or build” growth and the use of leverage.

Using Ofsted inspection ratings as a guide, most of these providers deliver a good standard of care. To my mind however, the key question is: could these entities provide even better care (and outcomes for vulnerable children), if they were seeking profit sufficiency rather than profit maximisation? This question is, of course, contentious and loaded with value-based judgments, but I would argue it is a debate that we should have, as at its heart it is about our societal values. 

In January this year, the Secretary of State for Education announced a review into children’s care. It will be interesting to see whether or not this review engages with these issues.

I have used the children’s care sector as an example, but the issues raised apply equally to many aspects of care and other forms of public service delivery by the private sector. Part of the answer, I believe, lies in how impact is defined, measured and reported on.

The Impact Process and Impact Risk

The initial screening of an investment opportunity will consider the following and, in the case of impact-first investors, the investment will only proceed if the impact assessment proves acceptable across the following areas:

• • the ethos and values of the company and its mission,
  • the scale and depth of the impact and the impact score (perhaps using the IMP framework⁵),
  • its ambitions and plans to drive greater impact (perhaps using a Theory of Change model),
  • its willingness to measure impact and how that will be done,
  • the opportunity for the investor to enhance the impact (referred to as the investors’ additionality).  

During the investment period, the investor and the company will then continue to measure and track the change in impact.

Of note, one theme common across the impact investment sector is how few investors use independent assessments to measure impact during the investment period. Genuine independent evaluation of impact can be time-consuming and costly to procure, but arguably it should be done to avoid the risk of “marking one’s own homework”. 

At the point of exit too, life is somewhat easier for the finance-first investor. If there is genuine lockstep, then commercial and impact success are intertwined. Logically, this means that any buyer will seek to preserve that lockstep. This means the seller can sell to the highest bidder.

However, where lockstep does not exist- such as in the children’s care example above- the investor needs to consider carefully which buyer is most likely to preserve the mission of the business and the extent of any trade-offs between preservation of that mission, by selling to a like-minded buyer, and the potential to achieve a higher sale price and hence investor return by selling to a more commercially focused buyer.

Another area to consider are the incentives for the fund manager and its investment team. Carried interest or profit share is standard in private equity or venture capital funds. Management fees are also standard and paid as a percentage of assets under management. One issue for investors to consider is the extent to which these incentives are based on impact as opposed to financial performance.

Risk-Adjusted Returns

The Spectrum of Capital above refers to impact-first investing as accepting lower risk-adjusted returns. My view is that this is only partially correct. Some impact-first funds adopt a strategy of taking greater investment risk in return for seeking greater impact return.  Others do not. 

If we again use the children’s care example above, we can say that an impact-first investor that invests in a care provider will seek business growth at a pace that is consistent with the highest quality of care rather than one that is (at least in part) driven by financial return targets.

This allows more room to focus on the quality of care, staffing, resilience and risk management in all its forms. The lens of “sufficient” profit and financial return therefore arguably reduces operational and reputational risk. It also allows for leverage to be used less and perhaps also for the ownership of the company to be spread more widely. All of these factors should help reduce the investment’s risk profile, meaning that whilst the investor return is lower in absolute terms, it can remain attractive and even competitive on a risk-adjusted basis. 

In this article, I have outlined both the finance-first and impact-first approaches to investing and described some of the fault-lines between the two.  Each approach has its own and absolutely legitimate place on the spectrum of capital. Where lockstep exists, positive impact and profit maximisation can go hand-in-hand. In other cases, I believe an impact-first, or profit sufficiency, approach may be more appropriate and still offer attractive risk-adjusted returns to the investor.

I expect to see considerable growth in the finance-first segment of the impact investing landscape as more of the mainstream fund managers launch later-stage and buy-out style impact funds. 

As will be clear from the above, I also believe that there is a real need for the impact-first segment, both early-stage and growth capital, to flourish. To do this, there is a need both for more capital and for more support from investors who themselves have been successful entrepreneurs and wish not only to invest, but also help build exemplar socially-driven businesses.

^Footnotes:

^{1. Global Impact Investing Network in 2009.}

^{2. See Impact Investing Institute- www.impactinvest.org.uk.}

^{3. “Marginalised Returns” Stanford Social Innovation Review 2017, Bolis and West.}

^{4. Children’s Commissioner “Private provision in children’s social care” November 2020.}

^{5. See www.impactmanagementproject.com.}

^{About Scott Greenhalgh: After a career in private equity, Scott started working 12 years ago with a number of wonderful not-for-profit organisations that opened his eyes to the scale of social inequality and need in the UK. In 2016, he was fortunate to be able to combine these “two worlds” and lead Bridges Evergreen Holdings from inception. Evergreen is the UK’s first long-term capital investment vehicle for social impact investing. Scott is now stepping down from this role and this series of articles offer reflections on leading a pioneering impact first fund. The views in this article are the author’s own and expressed in a personal capacity.}

In a series of three articles, Scott Greenhalgh*, former executive chair of Bridges Evergreen Holdings, will share his thoughts on the landscape for impact investing in the UK. This second article looks at the UK social impact investment market and the different types of investment opportunities for investors.

* See bottom for more on the author

Missed the first article?

The UK Social Impact Investment Market

In the first article in this series, we looked at the Impact Investing Institute’s Spectrum of Capital and the ABC methodology that classifies investments as avoiding harm, benefitting stakeholders and contributing to solutions. 

To help define what we mean by social impact investment, we will use the Spectrum of Capital¹ from the EVPA. A spectrum of capital offers a continuum on which to plot the purpose of an investment. At one end we have grant-making which seeks a social return and accepts the full “loss” of capital. At the other, we have traditional investment that considers only the two dimensions of risk and return, with no consideration of the social or environmental impact of the entity in which is invested. 

Between these two extremes, the spectrum depicts different investment approaches that embrace the three dimensions of risk, return and impact, with the focus on financial return increasing as we move from left to right.

This article focuses on the “UK social impact investment market”. Whilst not a perfect match, this part of the market is broadly consistent with the middle section below which the EVPA defines as Impact First Social Investment on its spectrum of capital². This segment combines social investment (the funding of charities and not for profits) and impact first equity investing as described below.

Figure 1: Spectrum of Capital from the European Venture Philanthropy Association

Figure 2: Big Society Capital’s estimation of UK social impact investment market size

Impact first social investments include all return-seeking investment in socially driven businesses as well as lending to charities, social enterprises and socially driven businesses. It excludes at one end philanthropy, which of course makes no financial return, and at the other impact investment, that seeks a full market-rate return (known as finance first investment). 

Using a definition that is close to the EVPA one, Big Society Capital estimated the UK social impact investment market at £5 billion in 2019, having grown from £833m in 2011 and with over £1 billion of new commitments in each of the years 2017-2019. This is shown in Figure 2 (above). 

Figure 2 also highlights that the UK social impact investment market is dominated by social property investment and various forms of lending to charities and social businesses. These account for c 85% of the £5 billion total. 

Venture capital and equity investment into socially-driven businesses has grown but remains small at £473m in 2019. There are some 25 funds in this area, most are early-stage investors. The largest is Bridges Evergreen, which I ran, and which is a later stage investor with £51m of committed capital. Attracting private investors to these new funds has proved a challenge and for the sector to grow, more “enlightened” capital is needed.

There are a range of equity investment opportunities for private investors, but these are fund-based, as yet there are no impact equity angel networks. 

Outside of these statistics are a number of much larger sustainability and impact funds that seek market-rate returns. These include early stage “tech for good” investors such as Atomico, mid-market private equity style funds such as Palatine Impact and Bridges Sustainable Growth and the impact funds of major investment firms including those of Bain, TPG and KKR. The launch of more large impact funds is to be expected.

Also, outside of these statistics are ‘fund of fund’ investment opportunities such as the newly listed Schroder BSC Social Impact Trust plc that offers investors exposure to a number of the funds included in the above data, the Snowball fund of fund initiative and portfolios managed by impact focused wealth managers such as Tribe Impact and Rathbones Greenbank, where the investor can align the portfolio with their values and interests. 

As will be seen from the above, there are a range of opportunities for investors to invest into funds or entrust their investments to a small number of impact focused wealth managers or fund of funds. There are three broad areas that an investor might want to consider in more detail. 

Property and lending 

The segment of this market that has grown most rapidly in the past 5 years and now accounts for over 40% of the £5 billion total is property. Social property funds include listed vehicles such as Civitas Social Housing and Triple Point Social Housing REIT, off-shoots of major property firms such as CBRE and DTZ as well as social property specialists including Resonance and SASC that focus on funding property for charities. 

Social bank lending forms the second largest segment at around 35% of the total. This is provided by social purpose banks including Triodos, Charity Bank, CAF Bank and Unity Bank. Non-bank lending and the issuance of bonds by charities each account for some 6-7% of the total with much of the bond issuance undertaken via Triodos and Allia, a specialist social enterprise. 

These investments are often asset-backed and can be characterised as lower risk/lower return, with yields of between 3-5% pa. Investment liquidity is higher with the listed funds, medium based on matched bargains for many of the bond investments and low in illiquid private fund structures. 

Social Outcome Contracts

Social outcome contracts or SOCs are a new and innovative form of public sector contracting pioneered by Social Finance and Bridges Fund Management. The first such contract was in HMP Peterborough, a payment-by-results contract designed to reduce recidivism among those leaving Peterborough prison. 

Under a SOC, a public body- for example a local authority- issues a payment-by-results contract which, rather than specifying the service to be delivered, specifies the desired outcome. Payments are based on the extent of achievement of the specified outcomes. Investors fund the contract delivery and only if the specified outcomes are achieved, do the investors recoup their investment and achieve a financial return. In this way social impact success is linked to financial success. 

Outcome payments are set at a level that results in a net saving to the public purse; in other words, the cost of paying for outcomes is exceeded by the savings to the public purse through the intervention provided. Return targets are set at some 5-7% net for the investor and one of the attractions for investors is that these returns are dependent on contractual arrangements and therefore are not correlated with market factors.

In the UK, there have been to date some 80 SOCs, mainly investing in the themes of homelessness, vulnerable children and social prescribing (that is support to those with long-term health conditions). 

Venture and equity investments

This is the area of the social impact investment market where I hope to see considerable growth. Today, this segment includes some 25 small investment funds. Most are less than 8 years old and so have not been through a full fund cycle. Examples include funds from Impact Ventures UK, Nesta, Big Issue Invest and Bridges Evergreen. 

These funds invest to build Socially Driven Businesses, as depicted in the EVPA spectrum of capital. They are avowedly “impact first”, in other words while they seek an attractive financial return for the investor, they do not pursue return as a priority over the social or environmental impact of the investment. (I will focus more on the distinction between finance first and impact first investing in the third article in the series).

Most of these funds are early-stage investors. It follows that these are illiquid investments, higher risk as a result of the stage of investment and therefore attract investors willing to accept these risks in return for the potential high social impact that the funds can deliver. 

From my own experience of building a later stage impact first fund, it is possible to reduce investment risk and generate returns of around 9%+ net to the investor. It is also possible to reduce the risk profile of these later-stage investments and so offer the investor an attractive risk-adjusted return. (I will focus on how in the third article). The early-stage impact first funds could potentially generate much higher returns.

On the demand side, there are many mission-driven entrepreneurs seeking to build socially-driven businesses in the UK. These entrepreneurs will typically want to select their investment partner based on values alignment and support to be both commercially successful and deliver positive social impact, rather than on financial criteria alone. 

On the supply side, as many of the investment funds are small and lack a track record, it is hard for institutional investors to allocate meaningful capital to this sub-sector. So far, these funds have been championed by Big Society Capital and a small number of committed endowment funds and private HNW investors that want to see the impact first sector flourish. To enable this segment of the market to grow, it is imperative that the supply of capital increases, and this will most likely come from wealthy individual investors in the immediate future. We need more of them!

In the third and final article in the series, Scott looks in more depth at the distinction between finance first and impact first equity investing. 

^Footnotes:

^{1. Source: European Venture Philanthropy Association}

^{2. Please note this Spectrum of Capital differs from the Impact Institute one in the previous article.}

^{About Scott Greenhalgh: After a career in private equity, Scott started working 12 years ago with a number of wonderful not-for-profit organisations that opened his eyes to the scale of social inequality and need in the UK. In 2016, he was fortunate to be able to combine these “two worlds” and lead Bridges Evergreen Holdings from inception. Evergreen is the UK’s first long-term capital investment vehicle for social impact investing. Scott is now stepping down from this role and this series of articles offer reflections on leading a pioneering impact first fund. The views in this article are the author’s own and expressed in a personal capacity.}

In a series of three articles, Scott Greenhalgh, former executive chair of Bridges Evergreen Holdings, will share his thoughts on the landscape for impact investing in the UK. This first article tackles the definitional challenge for investors and philanthropists, considers the level of returns an investor can expect and places impact investing within the wider sustainable and responsible investing landscape.

– See bottom for more on the author –

What is Impact Investing?

The definitional challenge: impact investing

“Impact Investing” is a term first used by the Rockefeller Foundation in 2007. A definition from the Global Impact Investing Network in 2009 is of:

“investments made into companies, organisations and funds with the intention to generate positive, measurable social and environmental impact alongside a financial return”.

Using the GIIN definition, impact investing can be said to be:

• Underpinned by values and the intention to have a positive effect on social and/or environmental issues;
• Requiring the impact to be measured;
• Capable of, indeed should, generating a financial as well as an impact return. 

A values-based approach and intentionality are therefore central to impact investing. These values and intentionality should operate at the level of the investee company and arguably also at the level of the investor or fund manager.

At the investee company level, this means that the products or services of that business not only seek to do well they also seek to do good, or in the language of the Impact Management Project (IMP)¹, these businesses seek to contribute solutions to social or environmental issues.

Values and intentionality should also underpin the desire of the investor to support the investee company in this and be reflected in the way the investor conducts its own business. The implication of this for a potential investor in an impact fund is that they should ask about the impact criteria that the fund manager uses for investment selection, how the fund manager will seek to positively influence the level of impact post investment and how impact success affects the incentives for the fund management team itself including on exit.  

Implicit in intentionality is the ability to influence the actions of the investee companies and to stimulate an increase in the positive impact, over and above that which would have occurred anyway. This is often referred to as additionality.

For this reason, I define impact investing as requiring investors to take positions of influence and to actively support an increase in the positive impact, which means that I consider impact investing to be more relevant to private companies rather than publicly traded companies, where the influence of each shareholder is less. My definition is capable of embracing both material equity positions (in companies/projects) or debt positions that convey an ability to influence the impact outcomes. 

Impact investing also requires the impact to be measured and measurement operates both at the level of the investee company and also at the level of the investor. The highly regarded IMP impact management framework has sought to become an industry standard and is used by many organisations, including Bridges.  

Impact investing is expected to generate financial returns. This distinguishes it from philanthropy. I define impact investing as being investment in for-profit companies and use the term social investment to define lending (with a financial return) to charities and other not-for-profit entities.

The question of investor returns

But what level of financial return can be expected by an investor? And what level of risk is associated with the return opportunity? For the broader sustainability sector, a 2019 study² by Morgan Stanley analysed 10,723 mutual funds’ performance over the period 2004-2018 and concluded that there was no trade-off in financial returns between sustainable and more traditional funds. Indeed, sustainable funds reduced downside risk and so in aggregate offered investors better risk adjusted returns. 

A 2017 Wharton study³ analysed the financial performance of 53 impact funds that invested in private companies. The analysis concluded impact funds that sought to achieve market-rate returns were largely able to do so, again suggesting there is no trade-off in returns. Against this, a Stanford study⁴ in the same year queried whether many of the impact funds that sought market returns, could really be classed as “impact” funds as opposed to more traditional private equity and venture capital style funds that by virtue of investing in sectors such as health and education, could label themselves as impact funds. (This is a theme I return to in a later article).

It is fair to say that the relationship between risk, return and impact is quite nuanced. It is therefore important for investors to look carefully at how each fund manager addresses each of these three dimensions and the relationship between them.

A framework for responsible investing 

The Impact Investing Institute’s “Spectrum of Capital”⁵ offers a helpful way to think about all investing as being on a continuum between traditional investing that is concerned only to maximise risk adjusted returns, with no thought for the wider societal or environmental consequences of that investment decision, and philanthropy which is motivated to deliver the greatest impact return and is accepting of the full loss of capital. 

As we journey from left to right, the impact goals of the investment increase. Using the Impact Management Project’s ABC framework, the first stage is to avoid harm or “A”. This involves negative screening. For example, investment strategies that exclude gambling, pornography and tobacco stocks or companies with poor labour or environmental practices would be avoid or “A” strategies. Many mainstream fund managers offer “ethical” equity and bond funds that follow the “A” methodology. 

The next stage is to look for investments that are deemed to benefit stakeholders or “B”. Here companies and investors need to both avoid harm and consider positive impacts on people and/or the planet. For example, a food retailer might have a clear strategy to reduce the carbon and/or plastic footprint of its business with measurable targets. The “B” methodology is generally referred to as “sustainable” investing. As with ethical funds, mainstream fund managers offer a wide range of sustainable equity and debt funds; investments focused on addressing climate change would in most cases be classified as sustainable.

At the third stage the overall impact of the investment is taken into account and is assessed as to whether it contributes (“C”) to solutions for social or environmental issues. The desire to contribute to solutions, conveys intentionality and it is this that enables “C” investments to be considered impact investments. As noted above, I consider the need for intentionality to limit “C” investing to private market funds, both private equity and private debt.

^{Figure 1: Impact Investing Institute’s Spectrum of Capital}

Integrating ESG 

Another term frequently associated with impact investing is ESG, which stands for environmental, social and governance factors. ESG factors are implicit within the Spectrum of Capital. In order to analyse if a company avoids harm, benefits stakeholders or contributes solutions, relevant ESG factors need to be reviewed.

At its core, ESG requires companies to consider a range of non-financial matters that have a bearing on their brand, operations, employees, wider stakeholders and environmental footprint. ESG analysis and reporting can be seen as offering a framework for risk analysis for the companies and investors alike. For investors, ESG analysis gives a rounder picture of a company and its risk profile than financial metrics alone. The EU Sustainable Finance  Disclosure Regulation (“SFDR”) comes into force in March this year and is a first step in requiring ESG disclosure by certain investment firms. 

Finally, a note of caution. The above Spectrum of Capital is but one version that shows impact investing as distinct from other impactful investment approaches. There are other versions of the spectrum of capital that refer to these other categories also as “impact investing”⁶ and so define the impact investment market as much larger.

^{Image: Crossflow}

Finance first and impact first

The Spectrum of Capital shows impact investing on the continuum with it sub-dividing between finance first and impact first.  Finance first returns are expected to be at the prevailing market rate, in other words investors can achieve positive impact with no sacrifice to the financial returns a non-impact investor would seek with the same investment. As noted above, the Wharton article offers a positive view and the Stanford one takes a more sceptical stance as to categorising finance first as impact investing. 

Impact first investing implies some level of financial return compromise. This compromise can arise because the investor knowingly accepts a lower than market financial return in the pursuit of greater impact and/or because the investor is prepared to take much greater risk of loss in pursuit of the impact goal, for example by funding innovative high potential impact start-ups.  

I will return to the distinction between finance and impact first in the third article and conclude this article with an example of an investment that presents a low risk of financial loss with associated low financial return but offering high impact. This would be characterised as an impact first investment. 

The Ethical Housing Company

At Bridges Evergreen we looked for impactful and investable solutions to issues of pressing social need. One such issue is the increasing level of housing vulnerability in the UK with growing numbers of vulnerable households unable to access social housing and therefore dependent on the private rental sector for their homes. This has contributed to more failed tenancies, poor quality housing and homelessness. 

Evergreen founded The Ethical Housing Company (‘EHC”) in Teesside in partnership with a Social Lettings Agency. The idea was to buy property, make it decent and let it at affordable rents to those in housing need. We aimed to demonstrate that supportive and intensive housing management would enable vulnerable tenants to sustain their tenancies and this positive social impact could be linked to an asset-backed investment offering financial returns of around 3% – 4% per annum to investors. This is below the 5% targeted by other market return property funds. If successful, we believed EHC could scale up in Teesside and be a model replicated by others elsewhere in the country. 

The results to date have been positive. Throughout Covid, tenant rental arrears have remained below 4% and tenancy stability has been high, which is testimony to excellent and supportive housing management. EHC has now raised external co-investment including from the Teesside local government pension fund, which will enable EHC to double in size over the next 12 months. Though still early days, EHC is seen as a pioneering model of using private impact capital to tackle a pressing societal issue. 

In his next article, Scott will consider social impact investment in the UK in more detail, looking at the opportunities for investors to lend to charities and social enterprises and make equity investments in socially-driven businesses. 

^Footnotes:

^{1. See www.impactmanagementproject.com}

^{2. Morgan Stanley Institute for Sustainable Investing 2019; “Sustainable Reality Analysing Risk & Return for Sustainable Funds”}

^{3. Wharton Social Impact Initiative 2017: “Great Expectations Mission Preservation and Financial Performance in Impact Investing”}

^{4. Stanford Social Innovation review 2017; “Marginalized Returns”, Bolis and West}

^{5. www.impactinvest.org.uk}

^{6. See for example www.sonencapital.com}

^{About Scott Greenhalgh: After a career in private equity, Scott started working 12 years ago with a number of wonderful not-for-profit organisations that opened his eyes to the scale of social inequality and need in the UK. In 2016, he was fortunate to be able to combine these “two worlds” and lead Bridges Evergreen Holdings from inception. Evergreen is the UK’s first long-term capital investment vehicle for social impact investing. Scott is now stepping down from this role and this series of articles offer reflections on leading a pioneering impact first fund. The views in this article are the author’s own and expressed in a personal capacity.}