Impact Investment? - WMK [associates]

This afternoon I was involved in an interesting discussion with Rezal Kusumaatmadja and Wahyu Mulyana, two partners at WMK [associates], about impact investment. Critically Rezal highlights what impact investment really is from an investor perspective. There are a number of critical notes that turn out to be in line with what I have always believed. Experienced investors do focus on the quality of people and depart from trust. So it’s not about sophisticated and interesting proposals.

“Impact investment is about social and environmental values that investors believe can be achieved through their investment, but once we talk about how to achieve it, we can not escape from the logic of mainstream financing. In the end, investors will assess whether the products and services produced are bankable and able to attract other investors,” Rezal said. 

Those who are interested in investing in an area called ‘greenfield’, where people work hard to create and attract investors’ attention, are generally close circles, such as friends or family. Common investors are generally rarely interested in planting their money, although they keep an eye on developments that are happening in the ‘greenfield’. When the work of ‘greenfield’ is able to attract the attention of groups called angel investors, then the common investors begin to pay more attention. It was then that the logic of mainstream financing began to work, in which magnitude and scale began to be discussed. The question is whether social and environmental values as the initial idea of products and services can be maintained, when the logic of mainstream financing has dominated? Of course, it returns to the values that investors believe, whether they are simply looking for double-digit profits or wanting to generate social and environmental benefits, or both?

Warm regards.