In the empty aftermath of the Great War, the novelist John Buchan tried to find a sense of reason and direction with the words, “the only way that we can hope to repay our debt to the Past, is by ensuring that the Future is in debt to us”.
And there’s something about this concept that seems particularly powerful for us in the West at the start of the 21st century, after 70 years of quite extraordinary prosperity, and at a time when the future seems particularly unclear.
I’ve spent almost all my career, 25 years, in venture capital, and when I ask myself why, the same answer always comes back, because it’s fun. And it’s fun not only because I work with, and back, people I like, which tends to make life a lot easier.
But also because your job as a venture capitalist is to watch where the world is changing, and to gauge whether that change is going to result in growth, and above all in value.
But it’s only in recent years that it’s become clear to me that for the value to be lasting rather than transitory, it needs to have a social resonance and it needs to improve people’s lives in a permanent rather than temporary way.
A portion of the funds that we manage is retail money, in the form of venture capital trusts, and so we have about 15,000 private investors.
I’ve begun to explain to them, often in person at our regular shareholder conferences, the social aspect of our investments, whether they’re in education, healthcare, the environment, or indeed any number of other sectors that have a positive social impact.
I go on to emphasise that there need be no pay-off between this impact and an investment return; they are not mutually exclusive. If there is a tension, it’s one of timing; sometimes the social benefit becomes apparent early on with the financial reward taking longer and costing more, but the destination remains the same, and capital, if it’s patient, will win through.
I’m glad to say that our investors get it. They understand the importance, they understand the direction and they understand the reward.
This helps to inform a new initiative by Rob Wilson, Minister for Civil Society, who has created an advisory group under Allianz’ Elizabeth Corley, to look into how to increase individual participation in socially themed investment.
I’ve been asked to join the group as well, and the overall goal of being able to link private saving with altruism has to be a really good thing.
My overview is that, in an ever more cramped (and sometimes sharp-elbowed) world, any activity that is not socially positive can only be short term.
Not only that, but when it comes to finance, investment with a socially positive angle is just a lot more fun. And the potential for change is huge; as the great Groucho Marx once commented: “Just think what God could have done – if only he’d had the money."