Of Course You Can Do It!

What we want to invest in and what kind of returns we want are changing. There’s many things causing this shift (way too many to go into in this blog) but I’ll bet you are nodding your head in agreement.

Yes, we definitely want our capital back and yes, we definitely want a return on that capital, but we also want our capital to make a difference in the world.

But aren’t the two (returns and saving the world) incompatible? And doesn’t ‘saving the world’ introduce additional costs and risks that pull down returns?

There’s a lot of research showing that impact investing is out performing conventional investments. Those of us brought up on commercial investing find that pretty hard to believe. We’ll concede that companies that have a strong mission attract better, more highly motivated staff and because these companies ‘walk the talk’ they have strong values based brands. All of that can lead to better financial performance.

But here in New Zealand very few of the kinds of funds that make up this research are available for us to invest in. And even as they become available most of us will still want to do direct investing so we are up close and can see and feel the investment, like we do with Angel investing. Maybe that’s even more important with impact investing – we’ll want to see the difference being made in our community and our country.

So, are there direct, local impact investment opportunities in NZ? Yes, and they are definitely increasing, in number and quality.

There’s startups – often highly motivated young people keen on making changes now that will soften the blow of the inevitable environmental changes ahead. If you are interested in accessing these kinds of opportunities join an organisation like Enterprise Angels and become an Impact Angel or dip your toe by joining the Impact Coffee Club meetings featuring pitches by early stage impact companies.

There’s later, expansion stage investment opportunities. One of the two impact funds operating in NZ is the Impact Enterprise Fund which has completed (soon to be) 5 investments to date in proprietary seaweed extraction, innovative packaging, electric jet propulsion engines and a chronic disease management platform.

And there’s primary industry projects delivering important environmental and social benefits backed by NZ’s other impact investment fund Purpose Capital Impact Fund. Purpose Capital often leads deals for co-investment partners like philanthropic trusts who rely upon Purpose Capitals’s due diligence and expertise in structuring and assessing deals. Through this syndicated investment approach substantial ($6m) investments can be made in important impact projects. Deals currently in due diligence include an aquaculture project providing 100’s of jobs in NZ’s most deprived town, partnering with Maori in a horticulture nursery and lab creating high quality training and employment as well as commercial opportunities – smack in the middle of the largest upcoming kiwifruit orchards and a project converting underutilised Iwi owned land throughout the country into high value horticulture.

So, how are the returns working out I hear you ask. Alas, too early to say. So, like we did with Angel investing, I invite those of you willing to take the risk ahead of the known results to once again make a huge difference in NZ. Of course, you can do it!