On Thursday, the Impact Investing & Microfinance Conference was held as the Espace Namur in Luxembourg-Hamm, organised by the Association of the Luxembourg Fund Industry (ALFI), in association with LuxFLAG and the European Microfinance Platform (e-MFP), on investing for the future.
The one-day Impact Investing Conference enabled the organisers to bring attendees up-to-date with the most recent developments and trends in the field of investing with purpose, aimed at assets owners and asset managers aiming to achieve both financial return and social or environmental benefits covering Climate finance: What opportunities for impact investors?; Impact Investments: Experiences from the field; Impact measurement and Reporting: How to distinguish between "players" and "pretenders"; Reaching scale in Impact Finance beyond Microfinance; Innovative financial models to invest with impact and to reconcile the need for long-term commitment with the investor demand for flexibility and liquidity.
Christian Hertz, Chairman of the ALFI Responsible Investing Committee, explained that the annual conference started from a focus on microfinance but has evolved to expand its scope. He said that there is now a positive concergence berween investors and funds in term of impact finance. With green bonds being listed on the Luxembourg Stock Exchange, securities are being joined by fund managers who are taking a more responsible role.
On the other hand, the threats come from regulation and specifically distribution risks, acknowledging that EU regulators have had little time to act, but this should start to change.
He revealed that Luxembourg has renewed its toolbox to be able to offer a new type of fund, a RAIF, a Reserved Alternative Investment Fund, which should be launched after this summer, which is aimed at repacing SICARs as a more flexible solution.
Amit Bouri, CEO of the Global Impact Investing Network (GIIN) in New York, delivered the keynote address. He asked why Impact Finance is now developing. He said that we are living in a time of great economic development; however, there is also heightened awarenewss of great need, including climate change. Consumers are considering how they spend their money, from electric cars to fair trade produce. There is also a major generational shoft, with millennials having strong values. Investors are also now looking at investment strategy in a way not seen before.
He said that impact investments are made with the intention to generate social and environmental impact alongside generating a financial return. He acknowledged that there are around 15 different terms to describe basically the same thing, with some differences. Impact investing cuts across manys sectors and impact investors are quite diverse, ranging from foundations to fund managers and retail investors.
He acknowledged that new investors often ask about the issue of market rate of return, and he revealed that many impact investments now offer a market rate of return, illustrating that market rates of return are certainly achievable.
He taked about each GIIN programme addressing different issues, including educating potential new investors as well as institutional investors. He concluded that finance can have a positive impact on change.
The conference continues throughout the day at the Espace Namur in Luxembourg-Hamm.
Photos by Geoff Thompson (above): Amit Bouri, CEO of the Global Impact Investing Network (GIIN)
