Impact investing focused on innovation

By Vikram Barhat | April 4, 2011 | Last updated on April 4, 2011
3 min read

A participatory speaker series around impact investing, aptly named Eye4Impact, kicked off on March 29 in Montreal. The initiative is backed by TBC Capital Inc., a Montreal-based financial services firm with a mandate to provide investment strategies and solutions with a focus on impact investments.

The inaugural edition of the series featured Russell Read, former chief investment officer at the California Public Employees’ Retirement System (CALPERS). He currently serves as chair and managing partner of U.S.-based C Change Investments, a financial firm that aims to raise $2 billion for impact investments that supports new innovations in energy and materials.

Speaking to a lunchtime audience, Read said those looking for the next big wave of economic growth should focus their attention on energy, natural resources, sustainable technology and energy efficiency, the big themes to look at as an investor.

Acknowledging that the energy sector fell out of favour with the socially responsible investing (SRI) set since the 1980s, Read said a psychological shift is underway.

“The investment opportunities are as compelling as any we have seen over the past 20 years,” he said. “What we have now is a fundamental shift toward emerging markets, toward energy and materials and infrastructure.”

Construction, energy and materials, he said, are the core of human innovation and the centre of progress.

Investments that require new capital, new financial instruments and financial professionals have shifted dramatically toward energy, emerging markets, and infrastructure, he added.

The carefree days of investing in a diversified pool of North American stocks and bonds, work from 9 to 5 and patting ourselves on the back are probably over, warned Read. But he also assured the audience that quality investment opportunities still exist.

“I’ll submit to you that the quality of investments worldwide has not diminished; opportunities today are no less compelling compared to what existed five years ago or ten or twenty years ago.”

Since 2002, emerging markets have become an opportunistically interesting area.

“That’s a huge change,” said Read. “That it’s changed from the completely avoidable to the unavoidable is not only a critical change, but it’s underscored by the importance of energy and materials, a focus now in the emerging markets.”

Private equity firms and venture capital firms in the U.S. are training their focus on energy and materials. Calling them new opportunities, Read said they are completely different but no less “numerous or compelling than we’ve seen in the past.”

“We didn’t adapt to these new opportunities. We should be revising our actuarial assumptions somewhere on our plans,” he said. “If we invested in a diversified pool of North American stocks and bonds we shouldn’t have the same confidence or the same returns that we had earned in the past.”

Innovation, Read points out, has shifted toward energy and materials for the first time in decades.

The first event of the series was well attended as an estimated 180 guests from around the country packed the venue, Tudor Hall, Montreal’s first music hall, located at Ogilvy shopping centre.

Geoffrey Moore, co-founder and CEO of TBC Capital Inc, said the firm plans bring leading impact investors and social entrepreneurs to Montreal.

Moore said forthcoming events would feature Michael Van Patten, CEO and founder of Mission Markets and Mission Markets Earth LLC, an online exchange to facilitate transactions for multiple environmental credits and conservation finance mechanisms, and Charles Leitner, CEO, Greenprint Foundation, a worldwide alliance of leading real estate owners and investors and financial institutions committed to reducing carbon emissions across the global property industry.

Vikram Barhat