 Good morning How are you all doing this morning? That music is getting us off to a rousing start. Don't you think? So happy to have all of you here this bright and early launch to Socap. We had a great day yesterday looking at a lot of the diverse pieces of what's going on around the world and in our own space about impact investing and social entrepreneurship and ways to change the world for better as many of you know if not all of you at this point this is our 10th Socap and Lindsay Smolling who is our content producer and the curator of Socap has put together an amazing program for us this morning About this global movement and where it's come and how much room there is to grow in that space So I want to invite Tracy Pelangian from social finance to the stage to introduce this first panel that is really and truly going to give us a global perspective on what's going on With social entrepreneurship and impact investing around the globe Tracy Good morning, everyone and happy birthday Socap Ten years What I walked in this morning meaning and money harnessing markets and finance to to serve society I'm delighted to be kicking off Wednesday morning with an amazing group of folks from Far corners of the world to talk about the global movement in impact investing. So with me, we have representatives from India Mexico the UK and the good us of a and Before I move to the panelists who talked about this broader effort, which was started in 2013 which is now coined the global steering group on impact investing I just want to share a little bit of history on how this movement began which is incredibly exciting So for those of you who know Sir Ronald Cohen You will know that he's a force of nature So Sir Ronnie convinced the UK presidency when they were hosting the G8 back in 2013 to set up this task force the G8 task force for impact investing and as you all appreciate The G8 quickly became G7. This is even you know before the latest Russia woes This is the Crimea challenge back in 2013 and yet the seven countries really rallied behind this global vision and set up national advisory boards Of which you see some of these representatives over the last four years that G7 mandate has grown to 16 countries and the And the EU and then this past summer in Chicago where the MacArthur Foundation hosted the global steering group We were just extraordinarily blessed to have 560 delegates from 43 countries and the energy was just so palpable in in Chicago and as we look to the G20 when Argentina is hosting the G20 with a really sharp focus on inclusive economies were really excited to bring this Voice to those new settings and as we speak their efforts Being stood up in Africa in Latin America in Asia. So it really is an exciting movement So I'm delighted to be here to Have our fantastic panelists share some of their country Context so as you can appreciate there are these national advisory board which Together form the global steering group on impact investing and as I mentioned we have four wonderful panelists together With us here today, and I'll start off by asking Fran Siegel who's the executive director of the US impact investing alliance and then Successively to to each of the panelists to talk about each country's ecosystem The very specific regulatory political context the various stages of growth and how the national advisory board is in service of That country's priorities. So friend. Thank you Tracy and good morning everyone Great to see you all So I as Tracy said I'm Fran Siegel. I'm the executive director of the US impact investing alliance Which is a field-building organization dedicated to increasing the flow of capital to impact investing across asset classes globally So the state of the US market, I think it will be the topic of the next two days I will touch on some high points now if you're interested in the deeper dive I invite you to join Kathy Clark and I at 1045 at the Cal theater where we're going to have an hour Conversation about impact investing and the state of the field in the United States, but at a very high level When I think about asset owners moving into the space We see a kind of mainstream of impact investing and we'll be talking over the next two days I imagine about The pros and some of the challenges of that mainstreaming so we see institutional investors including foundations and even some pension funds and university endowments moving into the space While we also see high net worth families leading the way and even retail investors So there's been an interesting rise of robo advisors serving retail investors with public security options We have an increasingly complex intermediary landscape That will also be talking about over the next couple days and we also have mainstream both mainstream Incumbent and pure play asset managers like Bain capital and TPG rise and others entering the field while we have a pure place like DBL capital raising a third funded four hundred million. So we're getting to scale on the supply side We I think still need some evolution on the intermediary side, which maybe Lori can speak to I'm very excited about putting more of a spotlight on the demand side So impact entrepreneurs and public company managers that deliver impact after all that is why we're here is a focus on the impact So in the coming years, I'm very interested in that at a super high level our Mission is to put measurable social and environmental impact at the center of all investment decisions alongside Financial return and risk and we do that with a three-part strategy of creating and enabling policy environment for impact investing Catalyzed institutional capital flows for impact and building the movement as part of the global steering group and as colleagues of these great folks Fantastic friend Lori Spengler you may sound American, but you're actually here representing the UK NAB Tell us about what's happening in the UK. Thanks Tracy. Yes, despite my accent I am actually a legitimate member of the UK National Advisory Board I'm based in the UK and have been for quite some time And I think what's exciting about the UK National Advisory Board is that we the current board? We stand on the shoulders of the prior boards So we've had continuous engagement for many years, but with different people around the table And I think that's been very helpful to propelling more focus and more action when we look at the ecosystem in the UK We have a number of strong actors across the continuum that Fran referenced on the supply side demand side and intermediaries Big society capital is often cited as one of the exemplars on the supply side It's a it's the lead wholesale financial institution for impact businesses in the United Kingdom And it was created out of dormant bank accounts that the UK government instigated initiative to capitalize the bank It is growing both domestically, but more importantly It's also providing a model for other countries that want to adopt this approach and create other forms of big society Capitals in their own countries Japan being the latest at a much bigger size and scale than the United Kingdom actually did So what I would say is that the pieces of the ecosystem some strong actors exist But they're not yet to the level where they need to be to really transform Markets and go mainstream as Fran invited, but I would say also they're not working as effectively together So the connective tissue of the ecosystem is really not where we want it to be and that's where the the current nab is Focusing our efforts. How can we strengthen both individual actors? But more importantly the way those actors work between and among one another and the particular backdrop in the UK I would just add is is creating an opportunity for further engagement We have the ear of government coming out of the very painful Brexit vote and now the even more painful Brexit negotiations We have the ear of government. We have the ear of business. We have the ear of society because people recognize Business as usual has not worked for folks Inequality of income, but inequality of asset distribution is tremendous and it is a problem Climate change people are experiencing that and the burden of delivery of social services for an aging population Whether it's through health care or other types of social services These are pressing challenges and concerns and they're turning to us for ideas and solutions and suggestions So quite honestly the UK nab now is saying how do we tap that ear that engagement and convert it to action? We're issue our next report on October 16th And in the next round, I'll give you a few highlights of the types of things we're focusing on to convert engagement to action Thank You Laurie Rodrigo take it from here. Okay. Thank you very much and good morning everybody And so every percent the Mexican National Advisory Board, which is probably very new we have been working together for about a year She wrote on coin was in the conference organized in in Merida that we have been doing for seven years and he was surprised about the How the ecosystem was working in Latin America for impact investing and He invited us to start a national vice-lead for Mexico and we got approval last year from from the GSG So we're very happy to to be using this network of international Light manager organization and people to to really try to follow what it has been working in other countries We are in Mexico Far away from what is happening in the UK or in the United States But on the hand we have very big opportunities to to catch up You know, I think it's not just the impact investing ecosystem which is behind But it's the whole business universe like the private equity industry in Mexico. It's growing. It's it's it's new So we want to to build this new industry with different With in a different way, we don't want to change an industry We want to create a new industry which is starting in Mexico, so we believe that Being a being behind it's an opportunity rather than than a challenge It needs growing. I think the Mexican impact investing ecosystem. It's it's growing a lot So we have a lot of accelerators. We have private equity funds. We have the media very interested in talking about these topics We have some in universities are starting to put the curriculum the impact investment theory We have some government programs already investing or pushing forward agenda There's a fund of funds that may be coming soon to invest in an impact investing Some family offices, which is also very something very new in Mexico to have these Professional well-managed family offices. They're starting to invest in these funds and and asking about about the industry So so the industry is getting there. There are so many things we need to go through for example, I think having a Like big society capital back in Mexico looks pretty far away, you know, like It doesn't seem we have the openness from the government to start doing these kind of much deeper things We need but that's the challenge. We're gonna do those are the kind of things We need to challenge through the national advisory board. We believe we have a thriving industry I mean we have energy entrepreneurship and now but now we need some more and Align interest to to really push the generally some very specific issues that we believe is gonna It's gonna. It's gonna be able to make a strife like as an industry in Mexico No, I mean road river Thank you for underlying that one of the greatest of benefits of having this global platform is the sharing of knowledge across the naps and Laurie mentioned big society capital, which was created with unclaimed assets and Laurie also Alluded to the Japanese experience Let me just throw out the statistic which we learn collectively in Chicago The Japanese has approved by Parliament They start to work through the regs that annually because it's such a high savings economy that annually There is a billion dollars in unclaimed assets and they plan to put half of that aside to create a wholesale investment bank A lot of big society capital. It's just like extraordinary numbers So that is the power of the GSG and it's just really exciting so Cardic tell us about India, which is a fairly developed ecosystem and and you are hosting us in 2018 or for GSG absolutely. Good morning everyone. It's really a pleasure to be here and like Laurie You know don't let max and mistake you I've been working in India for the last 10 years And that's Tracy is saying the impact investing sector there is fairly developed and also somewhat distinct From other countries mainly in the in the sense that it's mostly focused on the for-profit side So it's very much a subset of the venture capital industry It's been around for 10 years of just last year. We had McKinsey put out a very detailed research report Capturing the state of the sector and what's been happening and they and they came out with some pretty remarkable findings So our national advisory board is constituted by what we call the impact investors council Which is essentially an industry association of VC funds foundations family offices such as Asha impact and others and In total there about 35 plus members So there's been almost five billion of US dollars that has been invested in the last six years The annual rate is about a billion dollars. So that's that's fairly healthy numbers most interestingly there's there's Returns that have been demonstrated the average IRR is about 11 percent which is fairly healthy And some some which are much higher so comparable to mainstream, you know venture capital So that is given a lot of commercial investors strong reason to come into impact investing and currently in India almost 50% of impact investment deals are actually done by mainstream commercial investors and the balance 50% by impact investors So that's a little bit about the state of the sector Currently the government of India, you know has a lot of national development priorities in various sectors Which overlap with those of impact investors specifically in areas like affordable housing clean energy Sanitation and financial inclusion. So increasingly the focus of the NAB has been to work closely with the government We have already gotten them to sort of understand impact investing as a sector and recognize the sector But now it's really about working in specific specific sectors and getting the access to capital to flow And looking a little bit ahead and some of the things that you know, the nav is thinking about And with respect to learnings from other countries It's it's this notion of social impact bonds Sir Cohen was in India a year and a half back and Evangelize this notion there was a road show that happened across Delhi Mumbai Bangalore and a lot of people are very excited And now we're actually talking with social finance and other large Institutions in India to set up outcomes funds for multiple sectors and look at both the for-profit and the not-for-profit sector And scaling up this work even further Really exciting times really really exciting times. So in Chicago this summer Sir Ronnie and his usual audacious Fashion it's kind of threw us all down the gauntlet and charge us with reaching tipping point 2020 Which he articulated a couple of goals around tipping point 2020 Chief among them is actually doubling the global assets in impact investing from the current 150 billion to 300 billion as well as doubling the number of countries represented on the global steering group all in service of the large and fairly daunting UN SDG goals, so Fran You know, we'll just go down the lane again Tell us, you know, how are we getting to tipping point 2020 in the US? Gosh shipping first 2020 seems right around the corner. Yes, so 2020 is nigh I'd like to talk a little bit about our policy work, which is one of the levers that the National Advisory Boards tend to use depending on the political climate So there were two Policy wins I would say that were very much a team effort that came through Q4 of 2015 One from Treasury and one from Department of Labor that both bared on fit the nature of fiduciary duty and allowed respectively Foundation fiduciaries and ERISA regulated pension fund fiduciaries to take impact factors into account when making investment decisions for foundations as they make and seek to make impact investing Choices through their endowment and for pension funds through their corpus and so one of the priorities of the alliance is to take those policy wins quote unquote and move them into action and so we are actively working with Foundations we're administering a group called the Foundation Presidents Council on impact investing It's a group of 20 leading foundation presidents committed to impact investing and so working to figure out ways we can partner Together to deepen the practice of foundation endowment investing and there we are partnering and You know standing on the shoulders of mission investors exchange and confluence and many others who have done some extraordinary work in this space Also Toe dipping around pension funds and working with others in that regard as well And then I wanted to pick up something particularly that that Laurie said around Access to capital issues and growing income inequality There's certainly a tense political environment in Washington right now. We believe that impact investing private capital for public good is something that has appeal across the aisle and We are working actively with members of Congress and select agencies to Figure out ways to flow through policy to encourage more private capital to flow to distrust communities in the United States So rural and urban communities And also to try to make the case for development finance in Washington So that more US capital can flow to folks in the bottom of the pyramid and emerging in frontier markets So in the UK as I mentioned, we're just about to issue our report We've looked at five areas where we really think we can move the dial on this tipping point and have concrete action And we've we focused on three main actors the government business leaders and Investors I'll just highlight three of the areas the first is we were focusing on how we can empower savers To deploy their savings in line with their values We believe there's just a mass opportunity if we really open up impact investing to everyone And not have this be An access point only for ultra high net worths or big institutional investors So empowering savers to deploy their capital in line with their values And there's a series of specific recommendations for government as well as corporations to make their corporate pension funds available In the offerings available for impact The second is to focus on public procurement the government itself in the UK spends over 240 billion pounds a year on Goods and services they are a huge actor and so we've actually put a series of recommendations where they will consider social value We've defined what that means impact value social value as a specific criteria in Evaluating who gets who wins in the public procurement who gets to deliver those goods and services We think that could be have a tremendous impact on a quantum of opportunity for impact businesses And the third is strengthening the UK's role in International development and I'm particularly because of the work that include does I'm particularly excited about this one a lot of our NAB work is domestically focused as it should be But this part of the NAB's work is looking outside the UK and particularly on the heels of the Brexit vote I think that the UK needs to reassert its Interest in the rest of the world and its relationship to the rest of the world We're home to CDC which is one of the leading development finance institutions in the world And we've made a specific appeal for CDC to become a champion domestically as well as internationally because in the UK we have two spheres of Operators and impact domestic actors and those who are based in the UK but operate internationally And what we've discovered is that they're parallel universes, but they rarely talk they rarely meet They rarely share learnings and they rarely co-invest and so we're making a particular push to break down the domestic and the International silo we think that can lead to further activity Well 2020 seems very close. So What we're doing with the within with enough we believe that There's so many things going on. It's we have a lot of individual Initiatives going through in Mexico, but as enough we want to be very careful on how we use this resource Which is the the most valuable resource, which is the power of being together So so we invited to the lab for example, we have the head of the private equity association We have the head of universities the head of banks, so we have a very diverse and very strong Network of people organizations That we believe that if we give the right structure and the right members We're gonna be able to really transform a lot of things So we've been very careful in not just doing things because we are a lot of energy so we have been very careful into Studying doing a little research now right now We are working on a piece of research to try to figure out which are the levels that we need to pull and What capacity we have a national advisory board because we believe that by 2020 we're gonna be ready to do that I mean we're we're our goal to for 2020 is to really have a strong national advisory board To be able to do the good transformation But we see the tipping point probably within more 10 more years and we believe that Impact is meant investing should be the new normal. We believe that we're not having these conversations in 10 years Everybody will be measuring their impact. Everybody will be willing to understanding that every investment should have an impact and We believe there's a big chance of a possibility to to transform this in the new in the new normal Impact investing will be the new normal and so we can go from tipping point to extinction and maybe 30 years Rodrigo Okay Karthik 2020 tipping tipping point I think look in India the scale of the problem is so huge But we're blessed to have a great entrepreneurial climate So we have a lot of entrepreneurs working on those problems The McKinsey research that I just referred to mentions that already impact investing in India is on an annual basis Impacting 60 to 80 million beneficiaries. So it's already at a very large scale So the government is starting to take notice of this But it's still a very small amount of capital. It's a billion dollars the government's development social sector budget in India is 150 billion so the focus is on really saying what are the lessons that impact investors have and how can the government Scale that up to really impact, you know, millions and millions of lives So disengagement of the government is happening The elections in India in 2018 so our current government actually itself has 2020 targets For example for housing because they want to say we need two terms to do this So for example 60 million urban homes need to be built a hundred million rural homes need to be built And what impact investors are doing is we're aligning our own work with this we're saying look We have invested in three four. Let's say affordable housing companies We've got a private sector model to this problem and the government is listening PM Modi recently inaugurated something called the champions of change Where he got 400 CEOs young CEOs including myself they need some 15 impact investors are in that 400 people and we're part of just today October 11th There's a discussion happening in New Delhi between impact investors and the government So I think that is gonna really have a big impact and specifically with respect to the outcomes fund Which I know you're involved in so closely the biggest names in India are involved in this the largest education foundation domestically Central Square Foundation the Michael and Susan Dell Foundation the Tata group which is our big corporate Of course the GSC and social finance and we're talking about a billion dollar outcomes fund So I think all of these things given the scale of the problems in India and what's needed and building upon the success of the Social impact investing sector is is where the future is that and the final point I would make is the importance of domestic capital that off the five billion dollars of capital that has gone into India 95% Is foreign capital and it's very welcome, but India is no longer, you know a low-income country It's a medium-income country. There's a lot of wealth generation that has happened in India So that is our focus as a shine packed in various other impact investors is now to mobilize capital from Indians And from people in those markets other emerging markets and complement the global capital That's coming in from the United States from Europe and from other developed countries. It really is exciting cardic I think for the audience is benefit you might want to just articulate a little bit how the education outcomes fund is actually a different structure than how we've seen social impact bonds develop in the UK and the US Sure, so very briefly as I said in India We've got a very for-profit venture capital-centric approach to impact investing and that's not for any other reason except is Regulatorily driven that you know taxes and so on and the not-for-profit sector and the for-profit sector are funded differently That being said The outcome fund is essentially going to take philanthropic capital from foundations from CSR from individuals So that's the outcome fund and then for-profit risk capital providers like ourselves can now in addition to investing in equity in growth stage companies also give Essentially a debt-like bond like instrument to an NGO and if the outcomes of that instrument are met in a defined way then in three years 500 girls in Rajasthan will have access to an education and that actually happens Then me as a risk capital investor that outcome fund will pay us the social service provider and the investor a defined rate of return So essentially it blends the for-profit and the not-for-profit world and it brings us all together And it allows us to unlock from a one billion dollar annual industry to a hundred and fifty billion dollar annual industry Because that's all the philanthropic capital that's technically available So it's very very transformative if this happens and it will happen in the next few years I love the optimism cardiac and the Indians are really blending capital in whole new ways And I see the clock counting down But I hope that you get a sense of just the extraordinary breath that we're seeing it from your middle-income countries to develop countries and The various approaches to bring the supply the demand side and a very healthy ecosystem in service of what we call tipping point 2020 And maybe extinction 2050 so that it is the new normal It is routine to think about not only risk return But also impact in our investment decision so that we can together With your help the SoCAP community achieve capital for its highest purpose So thank you very much for being with us this morning