Earlier this month, IQ-EQ hosted an insightful thought leadership event in Johannesburg for the South African investment community, themed on the topic of impact investing in Africa.
Attendees of the exclusive event enjoyed an inspiring keynote speech from special guest Christopher Bertish, a noted South African surfer, stand-up paddleboarder, adventurer and motivational speaker, followed by an informative panel discussion featuring an impressive line-up of experts from across the African private equity sector.
Kicking off the session was Sridhar Nagarajan, IQ-EQ’s regional managing director based in Mauritius, who welcomed the audience to the firm’s first Thought Leadership Series event in Africa since launching the IQ-EQ brand in March. He noted:
“Africa is of great strategic significance to IQ-EQ; we have 375 professionals based in the region, across Mauritius, South Africa and Kenya. Over the coming year we plan to invest significantly in key African markets; South Africa being the foremost among them. Today’s presentation is on a topic close to our hearts – impact investing – which has a vital role to play in bridging the social and economic divide in Africa.”
Sridhar then introduced keynote speaker Chris Bertish, an inspiring athlete who won the Mavericks Big Wave Surf contest in 2009 and completed the first ever solo and unsupported stand-up paddleboard crossing of the Atlantic Ocean in 2017. In his presentation, titled ‘Achieving the Impossible: The Mavericks Big Wave Story’, Chris said: “I’m dealing with an environment that is deadly, volatile, in flux and in change all around me. It’s very similar to the environment all of you in the economics and financial fields are facing. The only constant that we know in life is change. My advice is: plan for the worst and hope for the best.”
A dynamic panel discussion followed, moderated by Charles Buchanan, local managing director of IQ-EQ South Africa. Sitting on the panel were: Yvonne Maitin, Founder and CEO of private equity impact fund manager One Africa Capital Partners; Grant Cornish-Bowden, Business Development Manager of leading ESG and impact consultancy EBS Advisory; Langa Madonko, Investment Principal at specialist alternative investment manager Summit Africa; and impact investment expert Johnny Ohgrøn Hansen, Executive Investment Director of InvestPire.
Panellists were first asked about the importance of impact investing in Africa. “We are living on a continent where 90% of the wealth is in the hands of 10% of the people, or less. Unless we deal with this ticking bomb, I don’t see how we are going to generate returns for investors or for us as an economy,” said Yvonne Maitin.
On the question of why it is difficult to sell impact investing, Grant Cornish-Bowden commented: “The solution lies in being able to quantify the impact you are already making as investors. Explaining to an investee company what impact is and how you want to measure it in their business is difficult and sometimes not relevant to their business model. How you recommend to the GPs and the other businesses you are involved with and tackle the issue of measurement is the crux of the matter.”
How can we best measure impact? “An important aspect of measuring impact is to find out where it lives. Impact does not necessarily live in the entity but outside the entity. The impact is what the job meant or what the investment allowed. Impact measurement also comes at a price. The highest cost of this is data acquisition, especially when it is outside your direct sphere of influence. It is really important to understand what is relevant to your stakeholders and portfolio and the communities they serve. Choose the areas of impact you want to report on, and be incredibly specific about that,” said Johnny Ohgrøn Hansen.
Lastly, the panel participants were asked this key question: What is the best way to sell the story of impact investing? Langa Madonko responded: “A part of explaining ‘Why impact investing?’ is about being able to articulate the value you will extract from the interventions you have put in the business. For instance, to take the example of ESG, you must be able to say to an investee company that if you do the following interventions, there will be cost-cutting and social impact alongside. Another aspect is: What proportion of the story are you feeding back to the community? For instance, you must be able to say, we are not just creating jobs but these jobs are being created for the local community. Of course, the easiest one to sell is governance. It is always easy to tell a business why we are focusing on governance – to make the business investment ready.”
Summing up the proceedings, Charles Buchanan commented: “My take on this evening – we have Langa addressing some of the basic need issues in South Africa, Yvonne who gave up her corporate job to set up her own business to invest in other SMEs, Grant who has dedicated himself to measuring impact through his work on sustainable development goals, and impact specialist Johnny who chose to relocate from Europe to be here. A very good set of people to get us interested in the impact investing movement in Africa.”
He concluded, “IQ-EQ supports a lot of investment fund managers and businesses through Africa that have a positive impact on African economies. While our role is that of a service provider to the investment community, it is so positive for us to see the great impact that the businesses we support are making.”