Driving change through impact investing
The report looks at our distinct approach to impact investing and explains the theory of change that underpins our strategy.
Investment Director Anita Bhatia discusses our approach to impact investing thus far and our ambitions for the future.
For centuries, our predecessors managed the Foundation’s growing assets to make an impact on people’s health in what are today the London boroughs of Lambeth and Southwark.
Early last year, we decided to build on that by aligning our investing more closely with our charitable work. We allocated £40 million (5% of our endowment) to investments that improve health in the UK as well as giving us competitive financial returns.
Since we committed to our first investment, we have learned a lot about where we can focus to best achieve our goals and what some of the key challenges are going to be moving forward.
One year on, we have a bespoke impact investment strategy that aligns strongly with our organisation’s mission.
We have worked hard to arrive at it, collaborating with specialist impact investing consultants Tideline to identify market sectors that resonate strongly with improving health in the UK.
To date we have identified two broad categories, enabling us to explore opportunities in:
Our focus is to invest in funds which back organisations whose products and services help people live healthier lives in the UK.
Since we started our impact investment journey early last year, we have committed £16 million to investment funds:
This is an exciting portfolio – the funds are quite different in their geographical reach, investing style and in the problems they address.
Our long-term focus is on addressing the wider determinants of health. Our plan is to continue with our search and dialogue in the markets, working with peers and being patient as the market grows.
One year into our impact investing journey, we’ve learnt some key things along the way:
So far, we have been able to identify three funds strongly aligned with our impact focus that we are proud of. We’re keen to find others.
This year, we are considering early-stage investing in life sciences. Our longer term ambition is to invest in early health-related interventions and tackle wider determinants of health.
Biotechnology boosted by the unprecedented wave of innovation in science and technology is exciting territory. We are exploring early-stage investment given the immense growth over the last few years in start-ups and credible venture capital managers.
Our long-term focus is on addressing the wider determinants of health. Our plan is to continue with our search and dialogue in the markets, working with peers and being patient as the market grows.
We want to learn from others in our industry and share with them our experiences as a health impact investor.
That is why this week, I am delighted to be speaking on a panel at the Investors’ Forum in Geneva, where investors and fund managers gather to examine the latest industry trends, share lessons and explore what lies ahead.
We already collaborate with Big Society Capital who champion the impact investment community in the UK and with the European Investment Fund, global leaders in impact investing.
At the conference and beyond, I am keen to hear from others who can share investment ideas, want to collaborate and may help us bring impact investing into the mainstream in the UK. If you are interested, get in touch with T Clark, our Director of Private Markets.