New CEO of Impact Investment Group Says Sector is Thriving
14 November 2017 at 8:40 am
The impact investment scene in Australia is thriving, according to Daniel Madhavan, who has been appointed the new CEO of leading Australian impact fund manager, Impact Investment Group (IIG).
IIG announced on Monday that Madhavan, who previously had a 12-year career at JB Were and Goldman Sachs JB Were before serving as founding CEO of Impact Investing Australia, would begin full time from Monday and take up his role as CEO in January 2018.
IIG chair Danny Almagor said Madhavan was the ideal candidate to lead the business into the future.
“Daniel has the unique combination of deep experience in the existing financial system plus a clear vision for what is coming next: a humane economy driven by social responsibility and environmental sustainability,” Almagor said.
“Daniel brings such an impressive record as a leader in the financial services industry and the impact investing sector. We can’t wait to get started.”
Madhavan said he was excited to join IIG, which aims to shift capital towards investments that blend financial returns with deep social and environmental impact, at a time when the sector was growing rapidly.
“The impact investment sector is growing rapidly; rising to meet the social and environmental challenges that will continue to confront us over time,” Madhavan said.
“I have spent time at the helm of one of the oldest investment houses in Australia, and through this experience grew to understand the true power and importance of finance in our society.
“I look forward to joining a team that is harnessing this power to build a more equitable, sustainable and prosperous economy together. The horizon is full of opportunity for those dedicated to building a better world.”
Madhavan told Pro Bono News, IIG had shown courage in their approach to championing the sector.
“They’ve really played a pioneering role in that, and engaging with that and saying, ‘well hang on, what if we did look at investments that dealt with issues of climate change? What if we did look at property investments that thought really differently about how communities work and how they engage and people engage with each other in communities? What if independent of the policy vacuum we actually did raise capital to fund renewable energy projects? You know, what if we looked at venture capital opportunities and worked with entrepreneurs that cared as deeply about an issue and the impact that they want to have, as they do about building an amazing business?’,” he said.
“And I think that approach and that courage is something that I’ve found inspiring since I’ve had the opportunity to work alongside Impact Investment Group and you know that’s one of the big reasons why I wanted to join.”
Speaking ahead of the third Impact Investment Summit taking place this week, he said that impact investing was “really starting to take off”.
“It felt like a big shift last year, moving from the first year where it was really that pioneering group, into last year where you started to see a lot more mainstream names that were early adopters, and I think that momentum has only picked up since then,” he said.
“That is a big part of why I am excited about the role as well, is I think [now is] the time, it’s really coming into its own and that’s exciting.”
Madhavan said the potential to use finance as a force for good was “unlimited”.
“For me it just makes it just makes sense,” he said.
“In terms of all of us attaching our values to the way that we invest our money.
“I guess what’s been hard is to find a way to express that. And I think what’s exciting about leading an organisation like Impact Investment Group is it’s our job to find ways for people to be able to express their values through the way they invest.”
He said the sector had overcome a lot of the initial myths that prevented people engaging with impact investment.
“I think as a field we’ve resolved a lot of those things and I think we have a deeper understanding now that this is a field with many different players with many shapes and sizes,” he said.
“It’s not about this kind of singular definition of impact investing, and one thing means all things, that is not what impact investing is. By its very nature, when you’re starting to talk about people’s values and the impact that they want to see in the world you’re going to get complexity in that. People care about different things.
“So I think we’ve resolved a lot in the field. But I think there’s also a natural kind of journey for people to go on to make sense of that themselves. I actually don’t expect that that tension disappears.”
He said people were starting from a paradigm “where you don’t think about your values when you invest”.
“When you start to engage with that I think there is just a natural kind of journey that you need to go on and which starts with ‘can you make money and do good at the same time.’ You know, can you do well and do good. And I think as people engage with that they go on a process of discovery,” he said.
Madhavan said corporates also had a “huge role” to play in the impact investing ecosystem, from a number of different perspectives.
“I think corporates are potentially one of the users of capital that investors want to provide, so then how people are going to express their value through the way they invest, in many ways they are going to want to know what those companies are doing and they’re going to want to understand how those companies are part of creating a better world or how they are part of creating the world that they want to live in,” he said.
“I think how companies engage with that, and engage with investor expectations, is a big part of this.
“And I also think there’s another element which is companies themselves are having to understand the impact that they want to have in the world. I mean not just from an investor perspective but also from attracting and retaining talent.
“You think about this whole generation of young people every year coming out of university and one of the biggest questions they are asking companies that they are thinking about joining is, what role they’re playing in this world, and what their purpose is.
“And you know those are the questions that companies are being forced to explore for themselves in how they do business and how they attract and retain the best people as well as how they engage with investors.”
He said the conversation around impact investing needed to turn to activation.
“The theme of the summit is all around activation. And I think that’s the key here,” he said.
“So there’s always been running jokes about the talk to action ratio in the impact investment space. And I think I think we’re at a tipping point around that.
“Personally I am always of the view that things take longer than you would like them to. Everything takes longer than I would like it to… but I do feel even over that last three years where we have moved to a better understanding of what we want this to be and where the opportunities for the finance world and for investors to actually support impact are.
“I think we have a much better understanding of that and what models can work in that. And now is the opportunity to actually take some of the things that work to scale and to have the risk appetite to try things that maybe haven’t been tried before.
“And so that activation piece, whether it’s bringing things that have worked to scale, whether it’s backing the things that have worked, putting more weight behind the things that have worked, or whether it’s actually trying and backing new models. That’s where I think the conversation really needs to be going.”