Maximpact: Broadening the Definition of Impact Investing
Interview with Tom Holland by Marta Maretich
Maximpact.com is characterized by its “big tent” approach to impact investing. What made you set it up this way?
When I came in as an impact investor and started looking for deals I began to realize that the sector had structural inefficiencies. The deals above $100,000,000 are taken care of by private banking, the deals below $25,000 are handled by micro-finance and other intermediaries. Everything in between is a sort of no-man’s land where people are working in silos of activity, there’s insufficient deal-flow and insufficient liquidity. The good news is that the sector is really beginning to wake up to the problems created by this gap; a recent article in the SSRI, Closing the Pioneer Gap, described the problem very well, I thought. From our point of view, one of the things that makes the gap wider and dilutes the market is the very narrow definition of what counts as impact investment. I thought this was something we could work on by building our deal portal around a broader definition of what an impact investment could be, and so drawing in widest possible field of players from philanthropy, CSR, the eco; green technological sectors, entrepreneurs, intermediaries and funds.
What is that definition?
At Maximpact we say that as long as the investment is good for the planet and good for its inhabitants; and that includes animals, not just people; we consider it to bean impact investment and subject to quality checks we will allow it to be listed on the site. This approach allows us to be far more inclusive in terms of the kinds of deals we list and it lets us reach out to a broader range of investors, some of whom are new to impact investing. Our aim is to draw more players into the arena, get them working together to increase deal-flow and encourage innovation.
Is this approach controversial?
Less and less so. The idea of using financial models to bring social and environmental benefit has really gained ground across the whole sector and with the public in recent years. Some of the prejudices about how that should be done have gone away, and that’s a good thing. Everyone is beginning to see that it’s possible to use a whole range of financial approaches, involving a broad spectrum of different kinds of players, to do good. The important thing is not the means but the ends, the outcome, defining and accounting for the benefit. The sector still has some way to go before we have a sure-fire way of doing this, but we’re all working on it. In the meantime, we think experimentation and innovation are the best ways to learn what works, and we are doing our part to encourage them by being as inclusive as we can be and facilitating collaboration wherever it happens.
So who should be using the Maximpact platform?
I want to see everybody using it to list and source deals: financial intermediaries, funds,asset managers, foundations, philanthropists, venture philanthropists,technology start-ups, qualified family officers, governments, high net worth individuals, banks and other major financial institutions. I’d like to see more CSR investors active on the site; this is a new way to give something back to society. I’d like to see more foundations using the site to source PRIs and MRIs through the platform. Foundations represent a huge pool of capital that’s still not committed to social benefit and Maximpact can help them achieve more in this area.
What can these different players do on Maximpact?
Maximpact brings together all the players; philanthropy, impact, funds, CSR and eco; green technology. In a simple way it enables people to find each other and to find the types of investments they want. They can all come onto the platform, contribute deal flow and get into a collaborative environment where they can cross-invest with one another. There’s no reason why philanthropy can’t take part in an eco or green tech investment, and the same goes for CSR.There can be two or three different kinds of investor taking a combined investment position. At the same time, the platform allows users to reach out to specific funding groups and find like-minded entrepreneurs and investors, if that’s what they prefer. It’s all about being inclusive and collaborative and trying to resolve the bigger issues that we’re all facing.