News: Magpie Advisory featured in 'Rising Powers' Blog
Impact investment is loose term but firstly means avoiding investments in areas such as weapons manufacturing, cigarettes or other harmful products. But more specifically it means investment in companies that provide a social and environmental dividend alongside a financial return, typically this means investment in sustainable energy, education, microfinance, or sustainable agriculture.
While financial returns are usually easy enough to measure, impact returns are often more difficult to quantify and measure, which is where firms like Magpie Advisory can help design and refine impact strategies. I was lucky enough to chat with Aleksandra Gadzala, the CEO of Magpie Advisory who explained how her firm helped others design their own impact strategies and navigate geopolitical risk in emerging economies. After focusing on political risk for an African focused fund and completing a PhD on China- Africa relations at Oxford University Aleksandra took the plunge to start her own firm.
In one example Magpie developed a market risk framework and strategy for off grid solar companies entering the South East Asian market. Often firms have the technical knowledge and can have excellent products, but a failure to understand the politics and power dynamics of a frontier market can lead to frustration and failure as local forces act a brake on ambitions.
Existing firms can be closely aligned with the government, or regulatory capture can sting even the largest most well-resourced companies in the world. Off grid solar energy is an obvious impact investment as it brings energy and light to communities which often previously had no energy sources, at the same time it avoids the uptake of environmentally damaging wood stoves or fossil fuels.