Seminar 217, Risk Management: Impact Investing
Seminar | February 14 | 11 a.m.-1 p.m. | 639 Evans Hall
Speaker: Adair Morse, UC Berkeley
We study investments in impact funds, defined as venture capital or growth equity funds with dual objectives of generating financial returns and positive externalities. Being an impact fund elevates a funds marginal investment rate by 14.1% relative to a traditional VC fund, even more for funds focused on environmental, poverty, and minority/women issues. Europeans and UNPRI signatories have sharply higher demand for impact. Three investor attributes household-backed capital, mission-oriented investors, and investors facing political/regulatory pressure to invest in impact account for the higher impact demand. In contrast, legal restrictions against impact (e.g., ERISA) hinder 25% of total demand.