OCTOBER 2017

SoCap Ten Years On

Category: Executive Committee, Impact Investing, Impact Team, Managing Partners
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By Bill McCalpin, Managing Partner, Impact Investments

SoCap is the largest gathering on the west coast each year for (1) asset owners of various types that deploy capital to effect social change; (2) social entrepreneurs seeking growth capital; and (3) the wide range of intermediaries in between the supply of and demand for capital, including investing collaboratives, consultants, financial advisers, asset managers, incubators, accelerators, etc.  This year’s conference (October 10-13, 2017) marked SoCap’s 10th anniversary. The forum started in 2008 with 300 participants.  This year’s enrollment topped 3,000.

Impressions are necessarily a product of the sessions one attends and the conversations one has.   With that qualification, I offer the following reactions to the event.

The broad themes were familiar.  There was much discussion, as there always is at convenings of the impact investing tribe, of metrics, measurement, and reporting.  Scaling is a frequent topic as well, with repeated shout-outs this year to the recent emergence of larger funds such as TPG Rise and Bain’s Double Impact Fund.  Performance is another common focus -- some pointed to the GIIN/Cambridge Associates financial performance indices as a positive development, even as others argued that too much attention is being given to financial performance and not enough to social outcomes.

Three topics seemed fresh, or at least received more attention than in prior years.  First, intermediaries or, more specifically, the blurring of lines that separate different types of intermediaries.  In the past year, there have been instances of (a) registered investment advisers (RIAs) “integrating backwards” to take on short-term impact strategy consulting projects (perhaps to position themselves more competitively for longer term investment assignments); and (b) impact consultants edging into advisory roles without RIA status.  Are there emerging conflicts of interest, or regulatory risk exposures, that should be a source of concern?  Will the continued maturing of the impact investing sector lead to more specialization of intermediary roles or more combinations of different types of firms?

Second, the U.N. Sustainable Development Goals (SDGs).  This has been building during the past year, but there were many references to the SDGs as a framework for reporting on the social performance of an impact investor’s investments.  Is this a durable trend pointing toward greater convergence in reporting initiatives?  Or is it an idea that will pass when the next framework is proposed?  Highlighting its prominence, there was a separate track of sessions through the conference organized around the theme of the SDGs.

Third, the B Corp movement.  More and more organizations in the impact investing community seem to be embracing the B Corp standards as an aspirational objective – either they have gone through the certification process already or are moving in that direction.  The B Corp label is going mainstream … or at least what passes as mainstream in the impact investing world.

Finally, because the organizational scheme for a conference such as SoCap can sometimes help to chart the landscape, it’s worth noting that the main substantive themes or tracks for sessions over the three days were:  climate change, sustainable livelihoods, neighborhood economics, education, racial equality, and inclusive fintech.