In the wake of Finextra Research’s SustainableFinanceLive event, Richard Peers of ResponsibleRisk spoke with Damian Payiatakis, head of impact investing at Barclays and David Newman, co-founder of software fintech Delio, to dissect their new impact investing platform, Impact Agora.
Barclays, a sponsor of Impact Agora, launched the platform as an industry initiative in conjunction with Delio, to bring together the investors and intermediaries who are working with directly entrepreneurs seeking to promote impact investing. The initiative recognises that there is a gap in the market whereby these two highly motivated groups wish to connect and transact but currently do not have effective tools to do so.
The goal of Impact Agora is to provide shared technology and build a community of member institutions, thereby reducing barriers to investment and raising the profile of impact investing intermediaries and entrepreneurs.
Explaining Barclays’ involvement, Payiatakis said: “When we think about serving our clients such as single or multi-family offices and large-scale individuals, the growing interest in impact investing is there.
“At the same time they want to find interesting, high-quality deals. Being able to do this is often a challenge, especially at the early stage. Being able to find a way to connect this to the interested community was important for us.
“We also recognised the role we have to play in building the market. A lot of firms talk about support for the market, but we wanted to actively do something. In my mind, there is no point in talking about a problem, we wanted to actually build something and contribute to the wider ecosystem.”
Payiatakis outlined the three roles Barclays currently plays within the initiative:
- To find better quality deal-flow through the marketplace;
- To provide patient capital as a sponsor in order to get the Impact Agora platform up and running; and
- To use the bank’s connections and opportunities to bring in more players from both the existing community of impact investing and from wider mainstream sectors such as wealth managers, corporate venture capital funds, other corporate or investment banking clients looking for impact deal flow or access to capital in order to grow their organisations.
Is technology as important as the connections being established?
Newman explained that beyond Delio’s core remit of delivery of technological solutions to connect private capital with private investors, for Impact Agora “we worked with Barclays to determine and design what a digital impact investment proposition should look like, as well as leveraging our own network. We work with everyone from Coutts, UBS, NAB, through to family offices and angel networks and helping to recognise that these people all want to do more on impact investing and connect them into the marketplace as well.”
By way of example, Payiatakis mentioned a fund manager who recently launched a venture capital fund in the impact space with a focus on consumer goods. The fund manager visited the Impact Agora platform, was impressed by it, and showcased the fund he was raising on the platform where it was spotted by an investor on Impact Agora’s intermediary side. The two were able to connect and from there the parties launched respective due diligence processes which resulted in the investor writing a sizeable ticket toward the fund.
However, the premise isn’t only about finding people with shared investment objectives. Delio’s technology allows for interoperability between the private investors’ systems and the Impact Agora platform to deliver a seamless central marketplace.
Newman explained that from a technical point of view, the hardest but most compelling element is this interoperability of data: “it doesn’t sound like such a sexy phrase but it is quite an exciting area. For instance, Conduit Club uses our technology for their angel network and to showcase their deals through The Conduit Connect which allows them to present, visualise, demonstrate the impact which is important to them. At the same time, they want to leverage Agora and its great marketplace with Barclays to share their deal across and get co-investment from the network.”
From a technological challenge standpoint, Newman added that it’s essential to figure out how to share information on each deal or investment in a way for both parties to have constant, standardised, well-governed data sharing extending all the way to ongoing data-metrics reporting. In this way, Newman observed that “it’s great to see that people can work in their own ways while also being part of something bigger.”
Is the drive to a one-size-fits-all framework flawed?
Newman explains that the approach Delio takes is that they build the interfaces which allow firms to access the data that is relevant to them, “it’s the interoperability that interests me. I’m not saying we’ve got all the magic answers of how that Rosetta Stone works but that’s the way I look at the world; there shouldn’t be a Rosetta Stone, there shouldn’t be a prescriptive framework.”
He argues that while many people like to go down the road of common frameworks, the preferred processes or objectives can be vastly different from one person within a family or firm to the next. For instance, two people in the same family may wish to invest in exactly the same deal but for different reasons. In such a circumstance these individuals will care about or value very different things and therefore the data metrics required will vary.
“I am very ‘anti’ trying to get everyone on the same standard,” said Newman, “which sounds contradictory to the nature of the marketplace, but I think it’s so personal that you are far better off letting people have the ability to present data in a way they want to present rather than trying to be too prescriptive.”
Language and terminology have also been a key point of focus for the platform in order to help bring these groups involved to a shared understanding of the motivations and manner that information is presented. This is particularly important when it comes to showcasing the outcomes that these firms are generating, as the reporting should be carried out in a way that is consistent, manageable and able to be aggregated across a fund or community.
What’s next? How is involvement boosted?
“It’s a community, it’s a network play,” concluded Payiatakis.
“Therefore, the more investors and intermediaries we have coming on to the platform, who meet the network criteria (such as quality and thoughtfulness of their approach) the better off everyone will be…Reaching out is a really important part of the conversation.”