Consulting for Impact’s Post

Definition and Hallmarks of Systemic Investing! I. Systemic Investing Systemic investing is the deployment of financial capital to transform human and natural systems with the intention of advancing environmental sustainability and social justice II. Hallmarks 1. Systems Mindset The fundamental attitudes, beliefs, and dispositions-anchored in systems thinking and complex systems science-directing the way systemic investors think about societal issues and how to address them 2. Transformational Intent The high-level change vision for a particular system 3. Systems Analysis The generation of strategic intelligence informing capital deployment decisions in systemic investment programs 4. Systems Mapping Identifying and visualizing nodes, relationships, and dynamics within a system 5. System Boundary A conceptual demarcation that defines the scope and limits of a system 6. Leverage Points Places within a complex system where a (relatively) small shift can produce outsized effects in other places of the system 7. Theory of Transformation The overarching hypothesis of how a transformational intent could be realized 8. Transition Pathways An evolutionary trajectory-understood as a series of stepping stones of "adjacent possibles" —that a system might follow given its path-dependency and current directionality 9. System Financing Needs A hypothesis of the capital requirements for achieving a particular transformational intent 10. Coalition Building and Orchestration Developing and nurturing a group of investors and funders committed to a shared transformational intent and theory of transformation 11. Investment Architecture The design of the overall capital structure of a systemic investment program 12. Strategic Investment Portfolio A collection of assets funded with return-seeking capital sitting within the overall investment architecture 13. Investment Vehicle Design The form, configuration, and legal structure of the containers in which assets and unallocated capital sit 14. Nesting The deliberate synergistic alignment of an investment portfolio with a broader system intervention approach 15. Combinatorial Effects The synergies that arise when multiple interventions stand in a strategic relationship with one another Hallmarks at a glance 16. Measurement, Learning and Sensemaking A systematic approach to generating insights and a basis for accountability in systemic investment programs Check out the paper by Dominic Hofstetter and Jess Daggers, PhD at TransCap Initiative here: https://lnkd.in/d8vVTg7G #innovation #systems #systemschange #investing #sustainability #impact #socialimpact #socialjustice

learning systemic investing

According to McKinsey & Company, in 1958, the average seven-year rolling lifespan of a company on the S&P 500 was 61 years, as of 2021, it is 16 years. As value shifts, asset owners ought to be allocating to the growth equity strategies that will disrupt the incumbent large corporations that they own. When we started the M&G Investments Catalyst strategy, it was with the belief that we are at the intersection of a period of exponential innovation and a moment where new value drivers are emerging. Environmental and social costs are increasingly factoring into economic and commercial decision-making, especially as existential threats such as Climate Change accelerate. As a technology optimist, it is a privilege to witness the positive impact of the innovative purpose-driven companies that we support, as they create immense value by providing solutions to tackle some of the most pressing challenges facing people and planet. But there is a funding gap in the impact growth equity space, as my colleague George Rooke discusses in this insightful article. https://lnkd.in/eTy3dkPM #impactinvesting #sustainableinvesting #catalyst #healthtech #climatetech

Seizing Tomorrow's Opportunities: Embracing Innovation Through Funds #EquityInvestment #FutureInvesting #GoalPlanning #InnovationFunds #PortfolioDiversity #ThematicOffering In a constantly changing world, success belongs to those who welcome new ideas and innovation. This principle extends beyond the realm of technology and permeates every facet of our lives, from heal...

📷[FULL VIDEO] At the highly anticipated Global Investment Summit during #BEYONDExpo2024, we had the honor of hosting distinguished industry leaders who shared their invaluable insights on how corporations can overcome challenges related to innovation, adapt to rapidly changing market dynamics, and effectively integrate innovation into their overall business strategies. The discussion explored topics such as fostering a culture of innovation, implementing effective innovation processes and frameworks, identifying and nurturing promising ideas, and successfully commercializing innovative products or services. 🙏 Thanks to the main participants including: Nishtha Mehta, Founder, CollabCentral James Chou, Managing Director, Microsoft for Startups Matthijs (Matt) van Leeuwen, CIO, Sunway Group Kain Chow, Head of Group Tech Strategy, New World Development Company Limited 👉 Watch the full video here: https://lnkd.in/gdBYEaNn #Technology #Innovation

What do #finance and addressing social and environmental challenges have in common? The concept of #impactinvesting provides the answer. It bridges the world of finance with the world of social and environmental challenges outlined by the United Nations Sustainable Development Goals (SDGs). Impact investments combine financial returns with positive social and environmental outcomes. This approach aims to generate both financial profits and significant societal benefits. Here are a few key points about impact investments: 1. Dual Goals: #Impactinvestments aim to achieve both social or environmental and financial goals simultaneously. Investors in this approach seek to invest in ventures that benefit communities or the environment while generating returns on invested capital. 2. Contributing to Solving Social and Environmental Problems: Impact investments focus on selecting ventures that have the potential to address specific social or environmental issues. This sets them apart from traditional forms of investment, which primarily focus on financial gains. 3. Business Model and Products/Services: In impact investments, understanding the business model and the products/services offered by the company is crucial. Impact companies often focus on creating products or services that have a positive impact on society and/or the environment. 4. Sustainable Development: Impact investments promote sustainable development by integrating economic, social, and environmental aspects. Instead of focusing solely on short-term profits, impact investments emphasize long-term benefits for society and the planet. 5. Measurable Impact: Measuring and monitoring the specific social and/or environmental impact generated by investments is essential in impact investing. Investors want to see how their capital contributes to positive change. 6. Returns for Reinvestment: Financial returns from impact investments can be reinvested multiple times into new projects, thereby increasing the scale and sustainability of the social and environmental impact generated. Impact investments respond to growing social concern and the need for a more sustainable approach to business. This way, finance is used not only to generate profits but also to contribute to solving significant social and environmental issues. Are you using impact investments in your company? Would you like to start? Feel free to contact our subject matter expert and #ESG lead at #oryxgroup - Grzegorz Floriański - he will be happy to help!

💡Ignorance in the Ecosystem: Diversity Funds are More than "Tickets"💡 Whenever I mingle in investor circles, there's always this lingering "elephant in the room" vibe. In the realm of investment, diversity-focused funds often face the misguided perception of being mere "diversity tickets." However, data tells a different story—a story of remarkable performance and untapped potential. LPs: Did you know that a study by Morningstar found that diverse investment teams consistently outperform their non-diverse counterparts. Funds managed by diverse teams outperformed non-diverse peers by an average of 1.2% per year over five years, showcasing the tangible impact of diversity on financial performance. Also Research from the National Association of Investment Companies reveals that diverse-owned private equity firms have consistently outperformed their industry benchmarks over the past decade, delivering robust returns for investors. This underscores the financial acumen and market insight inherent in diverse-led investment strategies. Moreover, a report by Harvard Business Review revealed that diverse management teams were more likely to introduce new products to market, demonstrating a correlation between diversity and innovation—a crucial driver of long-term success in today's dynamic business landscape. By overlooking diversity-focused funds as mere tokens, we're neglecting a proven avenue for superior returns and innovation. It's not about fulfilling quotas; it's about maximizing profitability and driving meaningful change through inclusive investment strategies. Let's shift the conversation from diversity as a checkbox - to diversity as a catalyst for growth and resilience in investment portfolios. It's time to recognize diversity-focused funds for what they truly represent: a smart, data-driven approach to maximizing returns and driving sustainable change. All the data is there.

The world is changing — and so too is the world of #investing. Today, the systems approach to investing is gathering momentum. In this article, Christin ter Braak-Forstinger, Dr., LL.M., Co-Founder and CEO of Chi Impact Capital, and Dr. Tim Breker, Founder and CEO of Vytal Global share their insights: https://lnkd.in/eiB7CE2g

In the latest edition of Market Pulse, Smita Sircar, President & CEO at Gray Matters Capital (GMC), shares insights on building an investment thesis focused on gender-lens investing (GLI). With a commitment to empowering women and girls, GMC’s investment strategy is driven by gender-related megatrends and the mission of enabling women’s economic independence, particularly in underserved populations. Smita highlights how GMC leverages early-stage equity investments, Impact-Linked Loans, and Gender Outcome Monetization projects to support impact-first businesses that integrate gender intentionality into their core models. Smita discusses the evolving landscape of gender-lens investing, emphasizing the importance of business models that not only address gender gaps but also intersect with other impact areas like education, healthcare, and climate action. She shares examples of innovative businesses in GMC’s portfolio, such as ConveGenius and FinAgg, that are making significant strides in creating gender-focused impact through technology, financial inclusion, and sustainable supply chains. These businesses demonstrate the potential for combining gender outcomes with sectoral impact to attract more catalytic capital. To ensure real impact and move the needle on SDG-5, Smita underscores the importance of tracking critical gender-related impact metrics and creating partnerships that align diverse capital pools towards GLI. She calls for collaboration to scale the impact of gender-focused businesses and highlights GMC’s ongoing efforts to build a supportive ecosystem for these enterprises. To learn more about GMC’s approach to gender-lens investing and its impact, read the complete interview here: https://lnkd.in/gjjc78w2 

Wondering how LPs are judging emerging GPs in today’s market? Here are my takeaways from VC Fund Performance: New Benchmarks for 2024, hosted by Elizabeth "Beezer" Clarkson (Sapphire Partners) and Peter Walker (Carta)- 👉 Institutional LPs: We’re beginning to see them waiting until Fund 4 to write large checks ($20M+), emphasizing the importance of proving performance over multiple funds. 👉 Early DPI is crucial: Recycling early returns can turn a good fund into a great one. While the DPI feedback cycle is long and newer funds may not show meaningful DPI until later in their lifecycle, the ability to recycle and reinvest those early returns is key. Seed-to-exit timelines can stretch 10 years or more, and with early indicators like graduation rates to Series A dropping (40% in 2020 vs. 15% in 2022), the importance of strategic recycling becomes even more critical to driving long-term fund performance. 👉 IRR: Some LPs care more about IRR, especially those managing both public and private investments, while others focus on long-term returns. The first few years of a fund may show low TVPI, but that’s just the J-curve effect—long-term health matters more. 👉 Exit market: There’s a sense that the exit market may pause until after the election, with a potential rebound in late 2026. That being said, the M&A market could decouple from IPOs and pick up earlier. M&A typically follows IPO trends, but the dynamic might shift. 👉 Reserves strategy: LPs like Beezer are evaluating this on a fund-by-fund basis—do you double down on winners or spread your reserves across more companies? Over-concentration can be risky, especially before the growth stage. 👉 Fund deployment cycles: We’re seeing most funds deploy capital over three years now, with some outliers during boom times that deployed in one year. It’s critical to balance thesis-driven deployment with maintaining flexibility for pro rata rounds. 👉 Interesting (and exciting!) note: down rounds are still high but decreasing, and the frequency of bridge rounds is down, signaling possible improvements in the market. LPs want to know how GPs are navigating early years, even when metrics like TVPI are flat—especially in a slow fundraising market. They’re going to ask you the tough questions early: Why you? What have you achieved so far? Why did companies pick you? If you attended this session, I’d love to hear your thoughts. #emergingmanagers #gp #lp #fundraising