BVC welcomes a new investment manager to the team…

…here are his thoughts just a week into the job! 

Following over 20 years in Investment banking, structured finance and consultancy, (some may say coming “from the dark side”), I became very enthused and quite surprised to find such a dynamic and expanding sector in the Social Investment Market. Having just started with UnLtd, I feel lucky to have found an area that can use my skills and experience in a cutting edge, but also personally rewarding way. 

Here are my very “early-stage” observations of the opportunities and challenges all of us in this sector face:

 We are very fortunate that the UK is at the forefront of social investment amongst the developed economies. I believe this is a moment in history where those brave enough to innovate and utilise their knowledge gained in purely commercial roles can help set the agenda for the future. Hand in hand with some of the visionary people that have already done a great job developing social investment, I believe there is a huge opportunity to rapidly build a body of enterprise that is a force for good and can tangibly change our society and environment. The Social Investment Market in the UK can teach the world … but we must remember that we can also learn from models already out there, often in developing countries.

Whilst there is rapid and positive change, I am mindful that social enterprise is not a cure-all either. We must collectively make sure that the disadvantaged, those in poverty, or facing many other difficult problems are taken care of in our economic system, even as social investment takes an ever greater role. We also have a responsibility to not become complacent – with so much money coming into the sector, we need to make sure we are helping to create meaningful social impacts. To this end, there are many things we need to figure out and to create in order to keep the market on the right track. At its base is incubating and funding the most worthwhile, impactful and sustainable nascent social enterprises. This is what I’m most excited about doing at UnLtd: our core strength is key to the growth in this space.

We also need to engage more with investors – philanthropists, the public sector, as well as commercial investors – bring them exciting and uplifting opportunities and educate and provide them with metrics around social impact. Our success story will be that they understand and assess social impact as well as they do financial metrics and the parameters around success or failure in commercial investments. We have to become skilled at assessing, valuing and making future projections of social impact, whether in the form of a “social return on investment” or another calculation. It is also important that we keep the sector on the radar of all stakeholders in our economy and continue to attract the interest and pro-bono work from corporate partners such as those in the Connect Network, helping to mentor and build the social enterprises of the future.

From my perspective, this could not be a more interesting time. Personally, I have a new language to learn for social investment and look forward to meeting a whole new group of people building this space. It is awe-inspiring and humbling to see what everyone involved has already achieved (social entrepreneurs, social investors, those giving their knowledge and time as well as the investors and donors). The great thing is that everyone has a common purpose to enrich the lives of others, improve our environment and society and to do it in such a way that it is sustainable in a long term model and framework and will be able to adjust to change, filling the gaps that the market leaves and the public sector or philanthropy cannot effectively or efficiently plug. This opportunity to be involved in the Social Investment space is extremely special, rewarding and will be a exceptional journey, if my first week of meeting the Big Venture Challenge winners and some of the various investors is anything to go by.

Lennart Hergel 
Investment Manager, UnLtd 

 

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