An outlook from 1% of global assets under management

Apr 11 2022 · 7 minute read


Speaking at the British Venture Capital and Private Equity Association (BVCA) Impact Investment Forum, Daniela Barone Soares, CEO, Snowball shared the trends she sees for the impact investment market in the next few years:


Fresh out of business school and working in private equity, I first became a member of the BVCA in 1997. I felt private equity at its best really allowed me to understand how a business works, and how to help it thrive.

A lot has happened since then, and one the most significant shifts I’ve seen during my 30-year career in private capital is the pace of change happening around impact investment.

Many investors ask us: what is the difference between ESG and impact investment? I want to make this distinction before I go on, because if you want to live on a habitable, sustainable and equitable planet, ESG will not get us there.

ESG investing looks at the social and environmental challenges in the world around us only in terms of financial risk to the bottom line. A fossil fuel company might introduce a new policy to improve its diversity and in doing so score highly as a top ESG performer, because the impact of its actual planet-harming product is not taken into account.

Impact investment strategies instead, by design, set out to create positive social or environmental changes through the products and services provided. Like a social enterprise IT consultancy whose service is to connect clients with neurodiverse talent. They’re intentional about the impact they want to create, ideally the impact is additional to what would have happened anyway, and the delivery is measurable. Impact investors use ESG criteria but to us they are just "hygiene factors"; we then go far further, and get to work setting a strategy to achieve the social and environmental outcomes we want the investment to deliver.

So, back to the market. I see more and more demand from investors for positive impact because the investment case is clear: why wouldn’t you allocate capital into mission-driven, focused businesses that solve the biggest social and environmental issues we face, and generate risk-adjusted returns?

And yet, while the market is advancing, impact investment (distinct from ESG) remains a meagre 1% of global assets under management. I recently spoke at the launch of the first report sizing the market for the UK where EY and The Impact Investing Institute shared their estimate of £58 billion. We’ve had the Global Impact Investing Network’s survey for several years, and the most recent estimate they shared was $715 billion globally.

My experience talking to investors is that they want the flow of capital into impact to accelerate, while wider society and our planet needs it. There have been barriers to connecting private capital with positive impact (not least, the struggle I’ve described for investors and members of the public to distinguish this from ESG) and Snowball addresses those barriers: we’re a scalable solution proving it is possible to create market returns and measurable positive impact.

The companies which impact investors find and back are the future. But as investors and fund managers, we need to take a more systemic view of the part we play. The financial industry, perhaps through being one step removed from the products and services out there affecting the real world, has largely operated in a vacuum. It can’t any longer. We need to think as humans first, before we act as investors. There is no greater fiduciary duty than to invest in a way that will enable life – human life and natural life – to thrive as a result of our investment decisions. To do otherwise simply moves the cost into the future.

Inequality is the most pressing issue we face today – solving it is the most powerful solution for our climate emergency. We should be guided by decisions which account for the sustainability of all life, and then we can transition from an extractive to a regenerative economy. If we think “financial-returns-first” we will ultimately fail. Impact should be at par with risk and return.

Allocation of capital is key to the future of the world. We are working in one of the most powerful industries; one which can lead huge change. We must seize this opportunity. Bring humanity into finance. Be human. Every day and in every decision. What are you doing everyday with your money, your work, your energy?

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We invest in businesses that bring innovation to solve for two interconnected themes social equity and environmental sustainability. We offer investors a well-diversified, low risk impact fund, which gives access to a broad range of impact investment opportunities across public and private markets.

Our investment strategy is to maximise positive social and environmental impact whilst targeting a long-term return to investors of c.6%-7% p.a. net of all fees with relatively low annual volatility. 

1. High diversification

2. Leading impact strategy and measurement

3. Best practice governance and culture

SOCIAL EQUITY – spotlight solution

Auticon, part of the Ananda portfolio. Auticon is a company that employs over 200 people on the autistic spectrum (most of whom would not otherwise have access to the job market) into high value and highly detailed IT services, bringing cognitive diversity to the workforce.


Shark Solutions, which is part of the Circularity portfolio. Shark is a product from waste: it gives a new life to PVB which is the plastic film embedded in laminated glass (for example in windshields and architectural glass). It has developed technology to separate the PVB from the glass and use it in other applications, such as paint and carpet backing, showing what we can achieve with a circular economy.

Daniela Barone Soares, CEO, Snowball
Daniela Barone Soares, CEO, Snowball