More and more millionaires are signing up for the "impact investing" social. The key: they are very profitable

No one has become a millionaire by investing their money poorly, so following the investment trends of that 1% of the world population with exorbitant wealth can put us on the track of where capital is moving.

One of those trends that is taking center stage in the investment portfolio of millionaires is impact investing, a type of investment that not only seeks a return on capital, but also kills two birds with one stone by providing real benefit to society. .

Investments, yes, but with a social conscience. The term “impact investing” It is attributed Antony Bugg-Levine, co-founder of The Global Impact Investing Network and refers to investments in companies and funds that not only generate money, but also have a measurable and positive social or environmental impact.

In other words, they are investments that could be framed within the conventional venture capital framework, betting on small startups or companies that need financing to develop their projects, but with an additional requirement: their product must revert to some kind of real benefit for society.

Philanthropy 2.0: it’s not donations, it’s business. Impact investing has become a growing trend among investment funds. According to Forbes, many billionaires have chosen this type of investment to channel investments through their philanthropic foundations, which thus become venture investors in small or medium-sized projects that do not always find investment in conventional funds.

This is the modus operandi in which, for example, the Bill and Melinda Gates Foundation operates, which since 2009 has invested around 2 billion dollars in 70 initiatives. The financial return obtained from these investments allows the foundation to continue operating and invest in projects such as the one developed by M-KOPA, a Nairobi startup that allows people with few resources to buy mobile phone charging systems and solar-powered lighting.

Training, health and development. The foundation created by Mark Zuckerberg and his wife Priscilla Chan has already invested some 100 million dollars in more than a dozen impact investments in training, health, development and employment projects. One of these projects in which the Zuckerberg family has invested is Andela, a New York based startup with positive results in the training of developers in developing countries and connecting them with companies.

The computer magnate Michael Dell makes his investments with a social return through the foundation that bears his name, and in his case he is committed to feeding the business fabric of India, one of the emerging countries with the greatest economic potential according to data from the PWC consultancy.

Dell chooses to invest in Unitus Venturesan accelerator for Indian startups with projects in healthcare, education, fintech and mobile.

Investment foundations that are self-financing. Millionaire donations are more or less common among billionaires, but they are not exempt from some controversy about whether the reasons are real or a whitening of their image.

By making the investment through foundations that act as venture capital funds, the “charitable” spirit is diluted and the amount that each donor contributes to a specific cause in a personal capacity is not clear.

In fact, these foundations walk a fine line between supporting social projects and economic benefits, which some studies place at values ​​similar to those of conventional investments. These benefits return to the balance sheets of the foundations that increase their capital to invest in more projects.

Impact investing in Spain. According to him report Impact investing in Spain in 2021 published by members of the Esade teaching and research team, investments of this type in Spain do not reach the astronomical figures of the private foundations of billionaires, and their origin is based on private investment funds, ethical and social banking investments and foundations.

Even though he percentage of rich in Spain has grown by 4.4% In recent years, private equity funds have invested the most in this type of project, with an average investment of 2,481,304 euros per round. The foundations do it for an amount of 395,286 euros and the ethical bank with 84,868 euros.

The main destination of these investment funds of Spanish origin goes to projects related to the environment, in the primary sector and of a local or European nature, closely followed by social projects related to education and employment of young people and people in risk of exclusion.

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