Although Impact Investing is a relatively new term, its practice is not:
Impact Investing is a global phenomenon that has drawn investors from every continent, including development institutions, foundations, private equity firms, investment funds, banks and pension fund managers. The size of the market is currently estimated at US $50 billion and is expected to reach US $500 billion in ten years.*
Impact Investing encompasses sectors such as agriculture, drinking water, housing, education, health, energy and financial services. It aims at having an impact on the poorest and marginalized population: the Base of the Pyramid **(“BoP”).
Examples of the effect that is sought by impact investments include creating more jobs, more efficient energy, facilitating the accumulation of assets, the use of BoP suppliers and providing access to basic services.
Although the impact investment sector in Mexico has extremely committed participants, it is still very young and requires greater involvement to fight inequality in Mexico; social entrepreneurs need the support to grow and make a positive impact on underprivileged Mexicans through their projects.
PSM actively participates with other members of the sector in activities that:
At PSM we work to build social justice so that underprivileged Mexicans, the beneficiaries of each project, may receive the skills and/or opportunities designed to help them reach the full potential they are entitled to from their creation.
We are interested in projects that go far beyond being functional; we seek for them to be a means for individuals to reach their full potential.
Our reason for being includes providing social entrepreneurs and the beneficiaries of their projects with social, economic and human value.
It is extremely important for us to measure the value created by the companies where we invest, not only to have standardized indicators to help compare projects within the portfolio, but also to lower transaction costs and ensure the extent of our investments’ impact.
PSM conducted research on several techniques and methods for measuring impact that are used worldwide and has worked closely with the Global Impact Investing Network to determine the best way of measuring the impact of our projects while complying with our investment guidelines at the lowest cost of implementation that will, in turn, provide solid, useful evidence to the global impact investing ecosystem.
Finally, it is important to emphasize that measuring the impact of PSM’s portfolio also favors a culture of measurement in the sector that significantly adds value to companies and entrepreneurs by providing tools and information for management as well as an improved possibility to attract investment by legitimizing their mission and impact using worldwide standards.
PSM participated in the Latin American Impact Investment Forum (FLII). This is an event in which many organizations of the sector contribute to the development of entrepreneurs, investors, technical assistance providers and other organizations that are transforming Latin America. Over 300 participants gathered for the first FLII in 2010.
This forum gathered over 500 executives, development professionals, entrepreneurs, government authorities, impact investors and others involved in creating innovative business models to serve people at the Base of the Pyramid (BoP), combining creativity and resources of the sector with the yet unexplored socioeconomic potential of the BoP.
The BASE Forum provided the opportunity to participate in meetings with pioneering businessmen of the sector, to become informed about how companies of any size –from the smallest to the international corporations – are successful in the BoP markets and to discover what lies ahead for impact investing.
This event consisted of four work days in which leaders and social entrepreneurs participated as investors and sought to leverage resources, share innovations, promote partnerships and create synergies in order to jointly broaden their impact and reach.
In 2004, UBS instituted this competition in collaboration Ashoka, an international nonprofit organization. Displaying significant innovation, social entrepreneurs identified the most critical problems faced by our society and contributed new ways to resolve them. Visionaris salutes these entrepreneurs for the significance of their work for society. The goal of UBS consists in acting as a broker between ideas and capital in order to create an unlimited network of contacts.