Crossing $200M AUM and launching a strategic partnership with Bernstein Private Wealth Management are important steps toward our mission to move more capital into impact investments. This is just the beginning for us, and the asset management industry.
Earlier this month, we announced the $55 million final close of our first fund in partnership with Bernstein Private Wealth Management, the private wealth business of AllianceBernstein L.P. (AB), a leading global asset manager.
The new purpose-driven fund was offered exclusively to clients of Bernstein Private Wealth Management. The fund invests in venture, growth equity, and buyout funds driving impact in one or more of Impact Engine’s three core areas of focus: economic opportunity, environmental sustainability and health equity.
Scale is critical for the impact investing industry to thrive. From a financial perspective, impact investing must be able to compete on equal footing with non-impact firms, which means operating at a sustainable scale with competitive cost structures. From an impact perspective, we stand a much greater chance of meaningfully addressing the issues we are targeting when we can invest in enough solutions, and invest as they scale to meet the challenges they are tackling. But scale without authenticity is insufficient.
It is an unequivocal positive for the world that traditional, large asset managers are raising and deploying impact funds. I spent eight years leading sustainable sourcing from within the McDonald’s supply chain and saw first hand how much impact can be created when a large firm can move the needle, however slowly or imperfectly. This is a critical part of the evolution of capitalism toward intentional societal benefit.
What creates the pressure needed to force that continued evolution? Competition. Change is hard and change at scale is even harder. Smaller, more entrepreneurial firms can move quickly and set the bar for the industry, redefining what is possible and giving customers other, better options - both directly and also indirectly through the pressure they create at their more established competitors.
At Impact Engine, we are working hard to set the bar for the asset management industry by demonstrating that impact authenticity with institutional scale and quality is possible. We have a ten-year history of building and improving impact management and measurement practices, and sharing them transparently with our investors. We look like the future as well, as a women-owned and led firm and majority women and BIPOC team, we embrace our diverse world and seek to build a more diverse asset management industry.
We built a strategy from day one that puts equal weight on impact and financial returns and learned where and how those types of investments are possible. We bring sophisticated portfolio construction expertise and ability to evaluate emerging managers (which most impact and diverse funds are) alongside deep experience making individual investments.
There are others in the field also seeking to build impact authenticity to scale in their own ways - from 100% impact-aligned wealth advisors to 100% impact specialist funds like Lumos Capital Group, Carbon Direct, or any of the others we’ve invested in. Each piece of the asset management field is critical to build with authentic impact and to scale. We are honored to be part of this grand construction project that is shifting capitalism in a more sustainable direction!
Bernstein’s decision to seek out a 100% impact-aligned partner to serve its clients should be applauded, not only by us because we are their partner, but also by the industry. This partnership has set the bar for a new type of model where large firms that are seeking a way to bring authenticity to their clients can do it through joint ventures and without compromising that authentic 100% alignment we and other firms are bringing to the table. It’s a win-win for scaling impact and it’s what the impact investing sector needs to achieve scale and create systems change.