Invited by the UK Prime Minister David Cameron to speak at the Group of 8 (G8) conference, the ‘Social Impact Investment Forum’, on June 6 in London, Colin Grassie, CEO Deutsche Bank UK and member of the Group Executive Committee, discussed the Bank’s initiatives and achievements in the impact investment arena. Impact investments are investments made into companies, organisations and funds with the aim to generate social or environmental value alongside financial returns.
Grassie was one of a distinguished group of keynote speakers, namely George Soros of Soros Fund Management, Iain Duncan Smith, Secretary of State for the Department of Work & Pensions, Dr Judith Rodin, CEO of the Rockefeller Foundation and Prime Minister Cameron himself. Addressing an influential international audience, Grassie outlined the scale of social problems in the UK and highlighted the critical role the private sector can play in helping to tackle these challenges.
Sharing his vision of social investment, Grassie said: “With sufficient engagement from institutions like Deutsche Bank, impact investment has the ability to become an asset class of true significance, and from this, a new model of ‘sustainable capitalism’ can emerge. My vision is for every asset manager to have a social investment fund.”
Emphasising Deutsche Bank’s commitment to take social impact investment to the next level, he said: “Impact investment should be fully integrated into the business model to make it not just a ‘nice to have’ but an integral part of business.”
Providing examples of successful impact investment initiatives, Grassie talked about the Community Development Finance Group which was founded by Deutsche Bank US in 1990. In the last two decades the Bank has invested a total of USD 2.4bn into the impact investment space. In Europe Asset & Wealth Management has built over USD 2bn in global impact investment funds that make Deutsche Bank one of the world’s largest impact investment fund advisors with a focus on food security, poverty alleviation and employment creation as well as climate change mitigation.
Based on the successful outcome of Deutsche’s impact investment initiatives to date, Grassie explained that he saw a great potential for such a success in the UK. In 2011, Deutsche Bank became the first investment bank to create a discrete ring-fenced fund, “Impact Investment Fund I” that brought the discipline of private equity managers to social impact investing. The fund sits within the Corporate & Investment Bank and is managed by the Bank’s Private Equity team within the Asset & Wealth Management division.
In his closing remarks, Grassie underlined that these examples of impact investments demonstrate the role banks can play in society and how financial engineering can be a “force for good”. However, he stressed: “To build impact investment into a true asset class, the public and private sectors must enter into a spirit of partnership and collaboration, Deutsche Bank cannot and does not want to do it alone.”
This is the first time that the G8 platform has been used to discuss social investment. The conference will help boost the growing social impact investment market by exploring issues such as sustainable agriculture, affordable housing, clean technology, and financial services for the poor.
Other industry leaders at the conference included Citigroup, Credit Suisse, Goldman Sachs, J.P.Morgan and Morgan Stanley.