Caroline Ashley

Caroline focuses on how innovative economic models can deliver more inclusive and resilient development.

Caroline has worked on markets, business models and investment approaches that deliver social impact for many years in roles with challenge funds, impact investors, entrepreneurs, corporates, NGOs and policy makers. As Results Director of the DFID Business Innovation Facility, and Sida Innovations Against Poverty programme, she founded the Practitioner Hub for Inclusive Business in 2010, then took on hosting it, and acted as Editor of the Hub for 7 years before it transitioned into managed by IBAN.

Most recently Caroline led economic justice programmes at Oxfam GB, before moving to Forum for the Future, to lead global systems change programmes to accelerate our transition to a sustainable future.

Moving social finance from niche to mass

12. Jun 2014

From Niche to Mass was the overall title of this year’s Impact Investing Forum organised by IIX and Shujog. Is impact investing going from niche to mass? Should it? What’s blocking it? How does mainstreaming happen? These are just some of the underlying questions addressed in the forum that took place in both Singapore and Paris, with the Hub as outreach partner.

I participated at the Paris end today, where Alison Eskesen, Director of Shujog immediately highlighted one of the dichotomies in this conversation. In Europe we are lucky to be having such a rich conversation about ‘mainstreaming’, because institutional investors (which generally means pension funds or others that are huge and obliged to target steady financial returns) are looking very seriously at impact investment. In Asia, it’s growing but still the domain of family foundations and high net worth individuals (HNWIs) who by implication have more discretionary funds but are smaller. That’s not to write off scaling up in Asia however, with Alison also pointing out that a remarkable one in thirty people in Asia are now millionaires.

Many panellists talked about Europe’s institutional investors being ‘on the fence’ or interested but not yet jumping. Nevertheless, it’s a big shift from just a few years ago and there are certainly signs of acting not just watching. Matt Robinson from Big Society Capital (which invests only in the UK, but in social investments) told us they have secured their first pension fund co-investor (meaning the pension fund is investing alongside BSC in a social investment fund). Matts sees the pension fund as likely to influence others in the mainstream. Matt Christensen from Axa Investment Managers reported on their €150 million fund of funds, with an aim to grow the impact investment sector. Compared to the total size of Axa (a massive insurance firm), this is no doubt small, but small investments by a serious player are not trivial.

Is the ultimate goal to have pension funds and all mainstream investors routinely allocating a share of their capital to impact investment? That was perhaps an implicit assumption. But one which needs a moment’s unpicking. Anyone who believes in enterprises that tackle social problems, and knows how they struggle for finance, will presumably believe that growing social finance (the supply of capital) is a ‘good thing’. Tapping into mainstream finance will unlock vast flows. It’s great that mainstream investors are now looking beyond purely the bottom line. But mainstream investors will enter where there is clear commercial return and not too much risk. David Korslund from the Global Alliance for Banking on Values warned us that we should not aim for ‘everyone to be in the same pot’. The pot that is suitable for institutional investors is probably not the pot that accommodates high risk, low return, high social impact business. But we still need that too. There are plenty of examples of businesses on this Practitioner Hub that can generate revenue and a return, and don’t need to run on grants forever, but can’t get finance if near-market rates are required. So let’s include the mainstream, but not shift entirely.

There were multiple ideas for how to expand the social finance space. To name a few:

  • Exits: until many more investors have exited their impact investment (e.g. sold their equity stake), we will remain foggy on the financial returns that can really be achieved, so many will remain wary. Or to put it in Axa terminology: ‘impact investment has to show a link to fiduciary responsibility over time’.
  • Good stories – not just data – to inspire.
  • Co-investor models, drawing in government and private finance, as is seen increasingly in Asia.
  • High levels of sophisticiation amongst entrepreneurs: investors, explained Andrew Stott, a lawyer based in Singapore, don’t want to be embarrassed. Faith in the investment team and a sense that a social investment is just as good as any other is therefore essential.
  • Not only more investible propositions, but larger companies ready for big ticket investments (Tanya Lobel from Actis described their interest in responsible investment, but with minimum investment size at $50 mn, they are outside the impact investment space).
  • Management fees and pricing that are sustainable over the long-term along the finance value chain. This area seems to be currently even cloudier than the headline financial returns that can be achieved.
  • Thought leadership, to push the sector forward.
  • Human capital, to provide the particular blend of commercial and social skills needed. MBA courses that get the best talent into this sector.
  • Market infrastructure - mechanisms for sharing information and making transactions.
  • First movers to make the move, and pave the way for others.
  • Foundations to start investing from their balance sheet not their grant allocations.
  • Measurable outcomes and returns.


Much of this is familiar, particularly to the DFID Impact Programme, of which I am a part, and which is aiming to grow the Impact Investment market particularly in South Asia and Sub-Saharan Africa. The Impact Programme model uses three levers: invest through funds into inclusive businesses to expand the market; demonstrate the processes and results of this investment to encourage others in; and provide grant finance for key components of market infrastructure.

Working in Africa and Asia, I have tended to see Impact Investment as a source of equity. Bank finance is so hopelessly limited it is part of the problem not part of the solution. So for me it was fascinating to get a better understanding of how far some parts of the banking sector have come. In France, Credit Cooperatif (CSI) already has a current account in which customers can select whether their deposits are lent for investments in the environment, fairer society or social entrepreneurship. 10% of the bank’s clients have already deposited €32 million in such accounts so far. SCI also manages a €150 mn fund of funds focused on impact investment and another €200mn fund which is open to private individuals and commits 10% to impact investment.

The Global Alliance for Banking on Values provided more encouragement. Their research shows that sustainable banks have actually achieved a better return/volatility profile than the world’s largest banks in recent years. This is the one (and probably only ) sector in which the financial case already seems to be made. David Korslund explained that GABV is initiating a fund for investors seeking to support sustainable banks by providing capital for growth. At the same time they are rolling out a scorecard for all banks including the mainstream banks to start improving their own performance: the 'mass' can improve their own scores (e.g. from 30 to 40 per cent) without aspiring to match the ‘niche’ banks with their specific mandates.

Further information

Learn more about the research conducted by the Global Alliance for Banking on Values here