Impact special: Building bridges with Michele Giddens

When Bridges Fund Management started up in 2002, there was such a thing as ethical investing. It was, however, avoiding the bad rather than actively investing in the good.

Michele Giddens

Founded by Sir Ronald Cohen and Michele Giddens, Bridges’ debut £40 million ($52 million; €45 million) fund was among the first based on the thesis that you could invest to generate social and environmental good, an idea initially met with scepticism.

“When we launched our first fund it took bold, visionary high-net-worth individuals or leaders within financial institutions and pension funds to be prepared to back us,” recalls Giddens.

Today the firm has raised close to £1 billion in capital across its growth capital, property and social funds; marquee names like Bain Capital and TPG have entered the impact game; and Bridges’ LP base is 80 percent institutional investors who view their participation as a normal part of their asset allocation strategy.

Instead, the questions around impact investing become more technical in nature. How do you make good impact investments? How do you benchmark your performance against others? What are the best tools and are you obliged to share them?

These are some of the questions being considered by Giddens as part of her role with the UK National Advisory Board on Impact Investing, part of a global steering group consisting of the EU plus 15 other member countries. It launched its report just as PEI went to press, outlining policies that it believes can “unlock hundreds of billions of pounds for positive investment cases”.

Among these is that investors align their investments with the UN Sustainable Development Goals to ensure that money goes where it is most needed, that local councils embed a 20 percent “social value” weighting into their tender process and that defined contribution pensions engage with their members to find out what kind of impact they would like their contributions to have.

“We think there has been a transformation from the idea that the sole purpose of investment is to maximise risk-adjusted returns to taking into account the impact of your investments on society,” Giddens says.