Last week in Oxford, Paul Cheng (Senior Investment Manager) and Rob Hodgkinson (Investment Executive) from CAF Venturesome gave two talks on social investment to packed crowds at the OxfordJam event which coincides with the annual Skoll World Forum on Social Entrepreneurship.

In their first talk, Paul and Rob spoke about how the UK social investment market can learn from the global microfinance industry. These learnings and insights from microfinance are the subject of CAF Venturesome’s latest publication ‘The Impact Investor’s Handbook’, which has now been widely acclaimed amongst the impact investing community around the world.

Key learnings include the need to coordinate early sources of grant capital in order to prove experimental fund models, the role of guarantee funds, the importance of information transparency and clarity about business models in an emerging market, and the danger of “mission drift” when pursuing commercial returns.

In their second talk over lunch, called “Impact Investing Confidential”, Paul and Rob tackled some of the taboo subjects in the sector.

One of the biggest taboos is the fact that the sector remains fragile, with few impact investment funds in existence, and those that do exist have limited track records. Actual impact is unclear, terminology is opaque and major market infrastructure remains wanting - this includes advisory services, corporate finance functions, secondary markets, and benchmarks.

To cap it all off, Paul and Rob were also interviewed on film by the lovely people at OxfordJam.

Paul and Rob: Lessons from the World of Microfinance from Oxford Jam.

You can also see a twitter feed of the most interesting tweets, comments and pictures around the events by visiting the Guardian.

Last autumn, Venturesome took part in the world’s first benchmarked social investment investee perception survey. This is a performance survey, gathering anonymous feedback from charities in whom we have invested. It was run by Keystone, a nonprofit based in the US. Six other social investment funds (all US-based and including Acumen and Grassroots Business Fund) took part, and our results were benchmarked against one another. 

Venturesome has run several feedback surveys in the past, for learning purposes, but this is our first benchmarked survey while the 45 survey questions covered a broader range of topics than we have previously. All current recipients of development capital were sent the survey, totalling 30 organisations.

We had a high response rate and were delighted with the largely positive feedback, but two key areas for improvement stood out:

1. the usefulness of our reporting
2. clarity regarding the non-financial support we provide

The report is now available on our website, as is our response to it, which goes into more detail regarding what we plan to do next as a result. We hope to run the survey again in around 18 months time, and will be encouraging other UK-based social investors to take part.

Standardisation of language is a key step in the development of any market, including, of course, the social investment market.

‘Social investment’ has been used as a way of describing our sector since inception, although it is not widely understood and appears to be falling out of favour. In recent months, ‘impact investment’ has gained greater currency.

Indeed, in the UK, the term ‘impact investment’ has become more popular since the launch of the joint Bridges Ventures / Parthenon report in March 2010.    

Thanks to Google, we’re now in a position to track the increase in use of specific terms and we’ve done this with ‘social investment’, ‘microfinance’ and ‘social enterprise’.  The Google trend graphs below highlight the increase in use of ‘impact investment’, ‘microfinance’ and ‘social enterprise’.

Social Investment

Impact Investment

Microfinance

Social Enterprise

Yesterday CAF Venturesome hosted an education round table on Impact Investing. Organised in collaboration with AlphaMundi, Marminie, Lapiluz and the Social Stock Exchange, the event was well attended with representatives from Monitor, The World Bank, Children’s Investment Fund Foundation, Chelwood Capital, Barclays Capital, Big Issue Invest, Big Lottery Fund and others.

Presentations were given that showcased recent activity in the international social investment marketplace, and there was a lively discussion on how those around the table can facilitate the growth of the market by guiding philanthropists and investors interested in entering the market, and the role of intermediaries in linking up sources of capital with charities and social enterprises that need financial support.

We’re in the early stages of the development of the social investment marketplace and such events provide a valuable opportunity for the growing social investment community to share experiences and recommendations.