Acumen and the role of ‘patient capital’

February 12, 2018

Sustainable Development Goals

Just over 12 months ago Innovest Advisory and PwC invited social investors, business leaders and government officials to come together for an inspiring evententitled Finance for Good. We had the pleasure of welcoming the founder of Acumen, Jacqueline Novogratz to the Channel Islands. As the keynote speaker Jacqueline shared her inspirational stories on the role patient capital can play solving some of the world’s most pressing development challenges like access to clean water, quality education and low cost household energy .

What is patient capital?

This is a term coined by Jacqueline and put into practice by Acumen. Patient capital recognises that markets alone cannot solve the problems of poverty; nor are charity and aid enough. Two-thirds of the world’s population still lives in poverty, and we need new approaches in order to find new solutions. We also need to recognize how challenging it is to build large-scale, lasting solutions in some of the toughest environments in the world.

Patient capital investing bridges the gap between the efficiency and scale of market-based approaches and the social impact of pure philanthropy. Patient capital has a high tolerance for risk, has long time horizons, is flexible to meet the needs of entrepreneurs, and is unwilling to sacrifice the needs of end customers for the sake of shareholders. At the same time, patient capital ultimately demands accountability in the form of a return of capital: proof that the underlying enterprise can grow sustainably in the long run.

Jacqueline explained that it starts by standing with the poor and recognising potential where others see despair. It demands investing as a means not an end, and daring to go where markets have failed and aid has fallen short. Principally, by catalysing entrepreneurship we can create a world without poverty.

Since its launch in 2001 Acumen has invested $110 million into 102 social enterprises in 13 countries in 6 key development sectors (agriculture, education, energy, health, housing and water & sanitation) positively impacting more than 230 million lives. Jacqueline has inspired 385 ‘fellows’ to co-invest with her to achieve this vision.

Out of this Innovest Advisory and PwC hosted an event with a number of individuals in the Channels Islands committed to join Acumen as fellows.

This event provided an excellent platform to showcase the power of impact investing and that Innovest Advisory is committed to stimulating dialogue and sharing expertise through convening future conversations.

Do what is right not what is easy.​”

– Jacqueline Novogratz