We’re investigating the barriers preventing impact investment from achieving its potential in London, so we can develop solutions for diverse stakeholders.
London faces many growing challenges: the immediate physical and mental health effects of the pandemic, an uncertain economic recovery, the impact of Brexit, and the growing threat of climate change.
It is unlikely that public spending, even combined with philanthropy, will come close to solving them, particularly given how much short-term spending is needed just to mitigate the immediate effects of the coronavirus pandemic.
London is also one of the world’s leading centres for ‘impact investment’ – where investors use their capital to generate social as well as financial returns. Impact investment is certainly not yet fully mainstream, and there are disagreements about what is properly defined as an ‘impact’ investment.
We believe that there is potential for impact investment to do more to address the capital’s key challenges. While there is appetite for impact investment opportunities from a range of investors, it’s not always easy for them to find organisations and projects to invest in that match with their goals and requirements.
This project will build on existing work to examine ways for impact investment to make more of a positive difference to Londoners.
London is where much impact investment is thought about and brokered, but often not where it is targeted. Moreover, the government’s levelling up agenda means that responding to London’s social challenges could be made all the harder by a shift of resources away from the city, leaving a gap for looking at alternate solutions.
Our research will seek to answer the following questions:
- What are the current levels and types of impact investment being directed by different groups of investors at London’s key challenges?
- What are the impact goals and financial motivation of these investors?
- What are the experiences of grant-making organisations and grantees in using grants to prepare organisations for impact investment (for instance by helping with their financial capacity to manage a loan)?
- How do the Greater London Authority (GLA) and local authorities view the potential of impact investment? How might investors better work with them?
- What lessons can be learned from other cities’ experiences with place-based impact investment?
We will produce evidence-based recommendations which have the potential to increase the quantity and quality of impact investment directed at solving London’s key challenges. These will be targeted to investors, organisations who are thinking of applying for impact investing, and city and national government.
If you would like to get in touch about this project, please contact Josh Cottell.