Social Capital Markets Annual Conference (a year on)

Today marks the beginning of a new SOCAP conference. This time around I will not have the opportunity to attend but I thought I would share some thoughts about my first visit to the conference last year. You can find it here, but just in case I’m going to share the whole text (it’s not that long).

From Tuesday 10th October to Friday 13th October more than 3,000 people assembled in Fort Meyers, San Francisco, to talk all things Impact Investing. This was SOCAP’s 10th edition and it was evident from the get-go this was a well-oiled machine – 150+ sessions in little over three days.

In other words, if you could go to every session it would take you some 13 days, no sleeping, to take in all that content available. To say I was overwhelmed before I set foot would be an understatement. In fact, I would be lying if I didn’t say that four weeks later I’m still trying to go over some of the conversations and topics I witnessed in my mind. Hence, for myself, and for anyone reading, I will organize my thoughts to unearth three takeaways from this experience.

Impact investing has an overwhelming (in a good way) number of applications and actors.

I was truly astonished by the sheer volume and availability of content at SOCAP 17. Thankfully the event had overarching themes to help newbies, like myself, navigate the array of alternatives per time slot, such as Impact InvestingMeaningRacial EquityNeighborhood Economics, and Sustainable Livelihoods.

I focused my first experience on the Impact Investing track and found myself naturally drawn to sustainable livelihoods and the sub-track inclusive fintech. Even by doing so I listened into organizations using blockchain in Southeast Asia to fight corruption, family funds from the US Midwest looking for ways to connect more directly with social impact entrepreneurs around the globe, and a b-corporation from New Zealand selling single-use disposable goods for the food industry. If these examples don’t show the breadth of applications of impact investing and its diverse actors, I don’t know what does. This is hands down what attracts me the most about impact investing. It might still be hard to find and make those connections, but someone with an innovative way to tackle a social problem you care about is out there, and someone hoping to finance it is waiting.

The impact investing universe is far from its final version, but it is well beyond its big bang.

Many times, during the conference I heard panelists and attendees voicing concerns about the lack of a shared language, or expressing how certain actors and vehicles are more readily available in better-established industries. So, even though this is SOCAP’s tenth edition, and it’s biggest, is impact investing here to stay?

Well, on the one hand, the growth of the impact investing sector seems to suggest so and is well documented – today, 1 in every 5 dollars in the financial capital markets is said to be socially responsible. Additionally, new regulation to the Employee Retirement Income Security Act (ERISA) is expected to unlock barriers to some of the largest investment funds in the US (in a nutshell, private pension funds can take social factors into account as long as returns are not compromised).

As such, I believe I witnessed some of this growth and development through the panel “Is impact investing ready for a secondary market?”  As the panelists said, this was planned as a “201” level discussion (as opposed to 101), and I would be lying if I said I managed to grasp everything that was being discussed between Debra Schwartz (MacArthur Foundation), Sasha Dichter (Acumen) and Laurie Spengler (Enclude).  What I did understand is that the key elements for the existence of a secondary market are beginning to materialize: critical mass and intermediaries. This could also be great news for the industry due to the longer-term nature of some impact investments and the less proven track record of exit opportunities in some industries or geographies.

Impact investing is a world movement.

Although a less technical assessment, this was the most important and uplifting takeaway for me. I was truly mesmerized by the diversity of the speakers and attendees. I was treated to conversations with a life-long American banker wanting to pour her knowledge and time into this newer industry, a Swedish member of government trying to understand legislation that would unlock the floodgates of impact investing, and an Ecuadorian entrepreneur looking for ways to connect with potential investors.

In all SOCAP was a humbling and motivating experience. I hope that I can return in a few years’ time to see what has changed about the conference and the impact investing universe. Perhaps I will return as an entrepreneur looking to make connections with potential funders, or as a practitioner looking for entrepreneurs and paradigm changing ideas that will address the world’s challenges.

(Not) Developing a habit and the global market’s response to elections in Brazil

So, almost three months after my first post I get to share the second one. So much for making a habit out of this! This has not gone as I had anticipated. But then again. What does?

My first few months in the “magic city” have been different to what I had envisioned and the new job has taken a fair bit of my time. Beyond time though, it has taken quite a bit of my headspace – as well as the move to Miami and a fair few visits from friends and family.

Enough of the excuses, let’s get this second post going. I thought I was going to touch upon some MBA related topics and life after “the best two years of your life” or whatever that means, but I’m going to go political.

Yes. I’m going to show my colors a bit too early probably. But let’s be honest, (i) how many people are really going to read this? (ii) if anyone does, they probably share my line of thinking (which would be a shame, because I welcome discussion and opposing views) and (iii) at least from now on ye’be warned.

First, a bit of context, have a look at this article from Bloomberg  “Brazil Stocks, Currency Surge as Bolsonaro Takes Commanding Lead”. If you are a bit lazy, like me, the clue is in the title. Which got me thinking –

if an openly misogynistic and racist politician doing well in the first round of voting in Brazil is a good sign to the markets, then what does that say about the markets?

To add insult to injury, and I swear I’m not making this up, “the former army captain has professed a disinterest in economics”.  And I know what some of you might say, it’s not so much that investors like Bolsonero, they dislike the alternatives, Haddad and the PT (Lula and Dilma’s political party that took Brazil to one of it’s worse recessions). Fair enough.

But indulge me for a moment, the world market doesn’t seem to care about a presidential candidate’s interest in the economy, it doesn’t seem to care about its social views on women and the LGBTQ community, it just cares about a government that will give it free rein. Or at least, it does seem to be skewed in that direction. I mean, “free economy” and “small government” do seem to outweigh “equal rights” and “social equity” when it comes to the market. Can we agree on that?

There’s no punch line. This was very much a “spur of the moment” post. I must admit it was fueled by a lot of press and posts around me but also about a quote from the Global Steering Group for Impact Investment (GSG) Summit in New Delhi. Apparently, @AlGore said something along these lines: “Capitalism is the answer if it can be refined and fixed”… well, it seems to me it needs an awful lot of fixing.

Come to think of it, so much so it might be better to do something completely new, right? Why not overhauling it? Why are we so scared to say: “Hey, Capitalism has led us to where we are today, and yes, we are alive, but that is much good as I can say about it”. How can we salvage something built on false premises and flawed assumptions?Apologies for the lack of solid arguments and research rigor, I love a stab at Nobel prize winning theories from bed on a Tuesday evening.

If you made it this far. Thanks. If you didn’t and you just scrolled down. Well, thank you too!

Saludos.

MC

#EleNao