investment strategy, impact investing was far more direct and proactive
and done with a view to making a difference.
“The largest institutional investors are all looking to better understand
their impact but a way of measuring this will be key. KPMG is working
on developing a dashboard designed to help investors do this; once
there is some sort of industry-wide framework we will see it really take
off,” he said.
This would continue to be driven by what he described as the
millennialisation of society—as a new generation matures and generates
wealth, they have a very different perspective on how they wish to use
their money. “They want purpose as well as profit,” he said.
Cowell suggested that as this concept matures and evolves it could
conceivably transform the very nature of the charity sector. On the one
hand, more money could be directed to good causes; on the other
hand, these same investors will want a return. “It will create a class of
investments that barely exists right now,” he said.
Alfred Fichera, global head of alternative investments at KPMG,
added that the concept of impact investing was not only a natural
evolution from ESG but also from what the industry was calling socially
responsible investing 10 years ago.
He acknowledged that one of the biggest challenges was agreeing on
common standards as to what this meant.
“It is a subjective concept. What is agreeable to one person is not to
another,” he said. “There will be natural differences of opinion in terms
of what is good and bad.”
He suggested that the concept of impact investing or ESG would
become central to the industry from the bottom up and become part of
the decision-making process alongside how much risk might be taken
in a portfolio.
“It is possible to create platforms or benchmarks that allow investors
to make these decisions,” he said. “Just in the same way as there are
multiple indices for stocks, there might be multiple approaches to this
where investors can choose their approach and tolerance using an ESGbased
He added that one part of such a metric could be the extent to which
an investment portfolio seeks and promotes diversity in the companies
it invests in.
A panel discussion on this topic overall agreed that investors increasingly
want their investment managers to embrace ESG standards but exactly
what this means and how it should be applied is still inconsistent.
A session called “The impact revolution”, chaired by Julia LaRoche, a
reporter at Yahoo! Finance, examined how the focus is increasingly on
investment managers taking into account wider factors such as doing
good for society other than simply financial performance when selecting
their investment strategies.
LaRoche also noted that millennials will drive this approach in the
future. “They have a different approach, different priorities and they
want to put their money to work in a different way,” she said.
78 CAYMAN FUNDS | 2019
premier of the
“The largest institutional
investors are all looking to
better understand their impact,
but a way of measuring this
will be key.” Tony Cowell
Seth Blackman, partner at KPMG, said that impact investing for
him meant attempting to quantify the wider impact a company or an
investment has on society. But he also acknowledged that quantifying
this was difficult; doing so, however, would eventually happen and
would drive growth in this sector.
He added that he had a passion for helping clients achieve success as
they define it as opposed to what he or others define it. “Understanding
millennials can be difficult but we need to see the world as they see it
and in terms of their aspirations,” he said.
Asha Mehta, director of responsible investing, Acadian Asset
Management, said that ESG means thinking holistically about the
companies you are investing in and their wider impact on society.
“We started to look at this around 10 years ago because investors
started asking very different questions,” she said. They wanted a broader
perspective of more than just the financials to consider anything that
could impact investments.
“We are only midway through what will be revolution in terms of
investors look at using capital and the impact it can have in the world,”
she added, saying that the use of data would also be critical to this
market in the future.
“We now have the tools to process unstructured data and this is a
very exciting area,” she said.
Anna-Marie Wascher, founder CEO, Flat World Partners, agreed
that the next generation wants transparency and innovation and an
alignment in how their money will be deployed. “They also want high
returns—their expectations are significantly different,” she said. “There
is a lot of real money being put to work in that way now increasingly
understanding how this can fit into an overall portfolio.”
Crypto continues to fascinate
The potential of cryptocurrencies was again a big talking point at the
event. One panel discussion discussed that, while it is unrealistic
to expect the world to grasp the enormity of the potential of
cryptocurrencies, which explains their fluctuation in value, there is no
doubting their long-term importance.
In a session called “Bits & Blocks: Mining for Alpha” chaired by Ran
Neu-ner, CEO, Onchain Capital, the panel explored the evolution of
cryptocurrencies including its challenges to date and the opportunities
of the future.
Scott Kupor, managing partner, Andreessen Horowitz, said in his
mind the analogy was the process of the internet developing, the
importance of some of the original protocols that were developed and
the impact they ended up having on the world as the likes of Google
were developed using them.
He added that the fact these are based on open source computer
technology is also important and will be an important factor in driving
the development of this market, as nothing will depend on any type of
central organisation. He also stressed that investors should not become
fixated on the currency aspect of this new world but also pay close
attention to the applications and infrastructure being built around this
that will make these markets operate smoothly in the future.