After much ruffling of feathers from co-founder Bono in past weeks, TPG Rise Fund CEO Bill McGlashan struck a more conciliatory tone in keynote remarks at the IFC’s 19th Annual Global Private Equity Conference in association with EMPEA.
McGlashan doubled down with an appeal for collaboration and desire to share data and learnings with other investors, “Because our small fund alone won’t be enough to address all of the world’s problems,” he said.
He observes, mathematically, that philanthropy’s $0.85 trillion in assets can only finance a third of a year of the annual $2.5 trillion needed for the SDGs.
He believes, strongly, in using TPG’s sector and geography expertise to pick the right entrepreneurs, and focusing on hard, audit-able, impact data will lead to outsized financial and impact returns: IMM, or “Impact Monetary Multiple” is a now officially a thing, and Rise has set itself high expectations on that front.
And of course McGlashan name-checked, with several shout-outs to the old impact guard — from Tideline to Elevar, from Endeavor to the (formerly Imprint) team at Goldman Sachs.
Later in the day, Rise got a shout-out back from Amie Patel, a principal at Elevar Equity. The two are strategic co-investment partners and Amie expects that this will help Elevar think more long-term when analyzing deals.
Patel’s remarks came on a panel dedicated to impact investing. Joining Patel was Lauren Cochran of the Blue Haven Initiative, Omidyar Network’s Chris Jurgens and Stephen Lee of TIAA.
The group took on value creation in impact investing. Unsurprisingly, a lot of it revolves around valuation (entry and exits), identifying talent, and execution (one would be forgiven to look at it as an exercise in building legitimacy, in these more traditional private equity surroundings).
Lauren Cochran was upfront, “We’re out here to prove a point, that impact can drive returns.”
Pathways to scale
The panelists discussed pathways to scale, much of it reflecting on ways to improving capital allocation.
Seed impact investors (more are needed! DFIs must step up!) can pave the way for more traditional VC investors in follow-up rounds, as Elevar experiences every day.
Inclusive finance does what it’s supposed to do, which is to scale up available lending-capital for entrepreneurs. Flexible capital tools (grants! guarantees!) can help build infrastructure for entrepreneurial ecosystems and the investment chain.
SDGs and impact have been quite the topic here over the last two days. The DFI community remains ambivalent — some wonder: are we impact? (see, my write-up from last year’s event for observations on the matter).
There were worries too — will impact investing experience the same hiccups as cleantech, and is the VC model right for it? Does the field have enough talent?
But Pat Dinneen, the emerging markets investing veteran and highly-respected Chair of EMPEA’s impact investing council, alleviated many concerns in closing the impact panel, “The future of emerging markets is impact investing,” he said.