Student Perspective: Diving into Impact Investing in Australia

Christopher Collins, a second year MBA candidate, spent four months as a summer analyst with one of Australia’s premier impact investment firms. Collins received funding and support from Wharton Social Impact Initiative as part of the Social Impact Fellowship program.

When I was considering my ideal impact investing internship, I envisioned myself working in a region near and dear to me: Latin America.

TiiG_Logo_StackedDuring my travels in many parts of the region, I witnessed extreme poverty and societal issues that opened my eyes — I saw a region that could sorely use attention from impact investing funds. However, I did not thoroughly consider the power of impact investing in developed markets until I received an offer to intern with Impact Investment Group (IIG) in Sydney, Australia.

As one of the first Australian impact investing funds, IIG seeks to show investors that competitive financial returns can be achieved alongside positive social or environmental returns.

Founded in 2013, IIG made its first investments in commercial real estate, a wind farm, and a solar income fund. Going forward, the company will look to make investments across a wide spectrum of sectors that can benefit from the power of impact investing.

One of the most important tasks for the Sydney office is to educate investors on how impact investing works. To this end, IIG organizes regular roundtables where potential investors can learn about the industry by speaking with industry professionals.

During my first week, I attended a roundtable discussion on impact investing held at the offices of one of Australia’s biggest wealth management firms, JBWere. Nearly thirty bankers, philanthropists, and high-net-worth individuals attended, and heard from none other than Sir Ronald Cohen.

Sir Cohen spoke about the very beginnings of impact investing and what inspired him to apply his financial expertise to investing in mission-driven enterprises through Bridges Ventures and Big Society Capital. Afterwards, a lively Q&A session took place. It was rewarding to see so many people genuinely interested in learning more about impact investing.

Additionally, IIG hosted another roundtable in August with the Kleissner family, founders of Toniic and KL Felicitas Foundation. Through these regular roundtables, the company is making more investors aware of how private capital can be leveraged to benefit society.

Sydney-Harbour,-Australia-aerial-viewOne of my biggest contributions during my summer in Australia was the creation of an informative presentation on impact investing. Building upon my previous research for the Wharton student-led social impact conference last year, I compiled a collection of basic definitions of impact investing, historical examples, and an introduction to financial innovations taking place to encourage these types of investments. These slides were presented to the Jewish Funders of Australia, a group including heads of foundations and pension funds, with the goal to dispel common myths about impact investing and illustrate the full spectrum of the field. IIG will continue to use this presentation in future meetings to educate potential investors on impact investing.

Another important task was the creation of a sector map for the Australian education industry. Starting from early childcare all the way to continuing education, I outlined the various private companies serving to complement traditional schooling. IIG will use this guide as it looks to make its first investment in the education industry.

Through this experience, I learned that impact investing is very important in developed economies. The truth is that every government has limited funds and cannot address all of society’s problems. When the power of private capital is leveraged using an impact lens, great results, both financial and societal, can result.

I strongly believe the future of investing and the wellbeing of our society are intertwined and am optimistic about the world’s future as impact investing continues to grow in popularity.

Chris Collins is a second year Wharton MBA student. He previously worked in wealth management at a family office and is passionate about using investment principles to tackle society’s biggest problems.