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Impact investment: On the slope of enlightenment


8 May 2019 at 5:31 pm
Wendy Williams
Impact investing is not a simple solution but there is a lot of opportunity in the market, says the executive director of Economic Strategy Division at the NSW Treasury.


Wendy Williams | 8 May 2019 at 5:31 pm


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Impact investment: On the slope of enlightenment
8 May 2019 at 5:31 pm

Impact investing is not a simple solution but there is a lot of opportunity in the market, says the executive director of Economic Strategy Division at the NSW Treasury.

Ben Gales is taking part in a panel at the Investing for Good Conference on Thursday, exploring the current state of the social impact investment market in Australia.

Speaking ahead of the panel, Gales, who was previously CEO at the Office of Social Enterprise Finance Australia (SEFA), told Pro Bono News he was passionate about impact investing.

He said in the decade he had been working in the space there had been some fantastic investments but he was keen to “temper his enthusiasm with some scepticism”.

“When I first started moving into SEFA, every week someone would ask us to speak at a conference. It has quietened down,” Gales said.

He used the analogy of the Gartner Hype Cycle – which depicts the life cycle that almost all new technologies follow – to explain the evolution of the impact investing market over the past decade.

In particular he identified three key stages; the peak of inflated expectations, the trough of disillusionment and the slope of enlightenment, where he believes Australia currently sits.

“Five years ago everyone was talking as though impact investing was going to transform the world, but it’s just not that easy,” he said.

He explained that in the slope of enlightenment stage, the market is more mature.

“There is more understanding that impact investing isn’t easy, measurement is tough and it can be hard to find the right partnerships,” he said.

But this stage also comes with more realistic application as expectations rise in alignment with what’s achievable.

He said there was a need to broaden the conversation, and be clear that impact investment was not synonymous with social impact bonds.

“Bonds are fantastic, they can be transformative for participants, but there is so much more to the space,” Gales said.

He said harnessing other forms of capital, while it had nothing to do with his role at government was the “bit that really excites” him.

He said he was “delighted” to see the Commonwealth government appoint Michael Traill AM and Amanda Miller to head up the Social Impact Investing Expert Panel.  

Gales also identified three key areas where the government had a role to play in catalysing growth; as a participant in the market, by putting the right framework in place and by catalysing the sector.

Looking to the future, he said what he found most encouraging was the “wall of capital” that was looming, with more people considering their social and environmental impact.

He said while there was still a shortage of investible products on the market, there has been great progress.

“Success breeds success,” he said.

“It is easier to raise capital now than it was five or six years ago, that will breed more scale.”

He made a distinction that scale was not just talking about large transactions, “but can we get lots of transactions”.

Gales said the next step was to open up the market to smaller organisations, so everyone could participate, as well as looking for more scaled transactions.

“We keep referring to Goodstart as the poster child for impact investing at scale but who are the next Goodstart?” he said.


Wendy Williams  |  Editor  |  @WendyAnWilliams

Wendy Williams is a journalist specialising in the not-for-profit sector and broader social economy. She has been the editor of Pro Bono News since 2018.

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