The conventional wisdom among impact investors and observers is that the election of President Trump has sparked a wave of investor activism, as purpose-driven investors seek ways to align their portfolios with their concerns for social justice and the environment.
But in the trenches of fundraising for impact ventures and funds, the story is less clear, says Michael Whelchel, co-founder of Big Path Capital. Two days after the election, the family office of a wealthy Mexican investor pulled back from a commitment just before a deal was set to close. The uncertainty over climate policy has made it harder than expected to complete a later-stage energy deal, Whelchel said.
“People are saying, ‘We just need to wait six months,’” he said. “We’ll still get it done, but we had top candidates say, ‘Wait.’”
[blockquote author=”Shawn Lesser, Big Path Capital” pull=”pullleft”]We’re hearing people say, ‘How can I get more involved, politically, or with dollars?’ I think it’s moving more capital to the space. People want to put their money where their mouth is.[/blockquote]
Big Path, which helps both impact funds and impact ventures raise capital, is hosting its 10th “impact capitalism summit” in Chicago next week. ‘The Trump Effect’ is the topic of a panel featuring green real estate developer Jonathan Rose, Northern Trust’s Mamadou Abou-Sarr and Ballentine Partners’ Will Tickle. Also weighing in will be Fran Seegull, executive director of the new U.S. Impact Investing Alliance and co-author of an open letter to both Trump and Hillary Clinton during last year’s campaign (see, “The Impact Economy: An Open Letter to the 2016 Presidential Candidates.”)
The theme of this year’s conference is “Building an Economy That Works for All.” Shawn Lesser, Big Path’s other co-founder, said the decision to emphasize social equity was a reaction to the messages coming from the new administration.
“A lot of people looking for, ‘What are the alternatives?’” Lesser said. “Let’s have a voice for what the impact economy is about. If you are part of a success in a business, we have to think about how we invest to make sure that everybody gets to share in that success.”
Wealth advisors report that, since the election, many clients have bumped up the percentage of their assets allocated to impact or ESG (for environmental, social and governance) themes.
“I think people are stepping up,” Lesser said. “In certain areas, we can’t just count on the government. We have to get involved. We’re hearing people say, ‘How can I get more involved, politically, or with dollars?’ I think it’s moving more capital to the space. People want to put their money where their mouth is.”
The Impact Capitalism Summit attracts representatives of family offices and other asset owners as well as fund managers and advisors. Many are there to educate themselves about impact opportunities across asset classes, from private equity to fixed income to real assets. Big Path, along with the Sorenson Impact Center, is expected to introduce a two- to three-hour online curriculum to bring financial advisors up to speed on impact investing.
“A lot of these advisors are hearing about impact investing, but they don’t feel comfortable enough to present it,” Lesser said. “There’s a knowledge gap. No one is going to invest in something they don’t feel comfortable with.”
Register here for the Impact Capitalism Summit. Use the code “FRIEND” for a $300 discount. ImpactAlpha is a media sponsor of the Impact Capitalism Summit.