Top five takeaways from my summer internship in Impact Investing

Top five takeaways from my summer internship in Impact Investing

“So what did you learn?” my boss asked me in the final week of my internship.

After a summer of struggling to make well-formatted PowerPoint slides, finding out after my final presentation that a fund track record is ACTUALLY the fund manager’s track record, and navigating the connectivity challenges of West and Southern Africa, I realized that this final check in was the first time I had actually reflected on my experience. While my response was not nearly this well structured and succinct, here is a list of the top five things I learned this summer for the WSO community, my former employer, friends and family’s perusal:

1) People matter

To those of you who have been working in the industry for years, this comes as no surprise. However, for those of us entering finance from non-traditional industries that assumed it was more Microsoft Excel and less interaction, this was a pleasant discovery.

2) Bet the jockey

Again, this may seem obvious to people who have been working in investing for years, but I was shocked to find how important management was to investment decisions. I’m not saying that any of the incredible entrepreneurs I had the pleasure of speaking to this summer could run a successful pager business in 2014, but the conversations I had with them were one of the key components of my investment recommendations.

3) Time is money

Over the summer I worked with a number of extremely impressive and equally busy people. I had to quickly learn that their time and attention was a privilege. After 10 weeks, I became very good at preparing for internal and external interactions so that the discussions I was having were productive.

4) It’s a dance

One of my favorite entrepreneurs from my previous career in public health once told me that fundraising was a like a dance. You had to know when to move in and when to back away. I found this advice useful in my conversations with company leadership and was amazed by how good the partners at my organization were in this regard.

5) Trust yourself

If you are interning at a successful organization, which I’m sure many people reading this blog have done or will do at some point, some extremely impressive person has decided that you have the potential to one day become successful as well. You should operate under this premise. You will make mistakes, as I did, but as long as you learn from them and believe in yourself, things will work out.

Isaac Gross is a member of the 2015 MBA class at London Business School. Before coming to London Business School, Isaac worked for the Clinton Health Access Initiative in West Africa and the USA. In Africa, Isaac managed a $10 million HIV medication donation, which provided lifesaving medication to over 50,000 people. He also advised governments on cost reduction strategies. In one instance, he helped Ivory Coast save over $3 million by convincing policy makers to update their HIV treatment protocols and buy medication from low-cost generic manufacturers. Isaac is at London Business School because he wants to transition from public health to development finance. He is on the executive committees of the Africa and Net Impact Clubs at London Business School and enjoys playing golf, tennis and rugby. Isaac graduated from Brown University in 2007 with a Bachelors in Science in Psychology.

 

would be curious on your thoughts on the differences between impact investing and SRI. personally I have a bit of a bugaboo with SRI because it dramatically limits your universe of allowed investments. for example (and this is hyperbole), if the CEO of JNJ used to smoke cigarettes or the founder of Intel doesn't recycle, you can't own those companies.

impact investing always seemed to me like private equity/venture capital but with a focus on companies trying to do a social/environmental good. first, is that a correct assumption? second, obviously the goal of investing is return on capital, so how does one balance the utility from feeling good about helping out with the necessary objective of getting a competitive rate of return?

 

While I am far from an expert in this field, I personally think that the difference between impact investing and SRI is the intention. The goal of impact investing is to address social and environmental issues through commercial capital whereas SRI is more an attempt to include a social component into investment decisions.

Your description of impact investing is basically correct, but the challenge is that impact is hard to define. There's a great report on the Open Society Foundation website on impact investing in education that details the spectrum of impact investors, from philanthropic to finance first (http://www.opensocietyfoundations.org/sites/default/files/impact-invest…). So to answer your second question, the balance between social utility and ROI is dependent on the type of investor.

 

What about the perception that comp in impact investing is lower than in regular investing? I'd imagine that that much must, at least, be true. Not something that matters much to me personally, because I'd quite like to get into impact investing for other reasons and I don't need much to live on, but it's something to consider nonetheless.

 

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