News & Views

Robert Hughes-Penney addresses the role of private equity and venture capital in growing the UK’s impact investment market.

Good morning,

It is my great pleasure to welcome you to this morning’s investor reception for our Finance for Impact programme. 

Looking around the room there are many friends and familiar faces, but for those I’ve not met I am Robert Hughes-Penney, one of the elected Aldermen of the City of London, and a Board member of the Impact Investing Institute for the last four years, prior to which I was on the Board of Investing for Good for four years. 

In the more than 30 years since I started work in the City, I have long held to belief that capitalism and markets are not about piling pound coins on top of one another; make a profit for sure, but importantly they are about the flourishing of humanity in the round. 

And the aim of this morning is a great example of that; the noble purpose of business; giving people purpose and helping move capital towards impactful investments. I very much hope and expect that this will be a dynamic space to foster meaningful relationships between Limited Partner and General Partners to help direct capital towards impact-focused venture funds. 

Of course, none of this would be possible without our hosts and supporters; Rothschild Wealth Management, Impact VC and Uplink. Your support is much appreciated. 

This is the final event in our series on the role that private equity and venture capital can play in driving the growth of the impact investing sector as part of the City of London Corporation Finance for Impact initiative, which aims to establish the UK as a hub for sustainable finance, and scale finance for social outcomes, and has been done in collaboration with the Impact Investing Institute, British Private Equity & Venture Capital Association (BVCA), Impact VC and Better Society Capital, to whom many thanks 

So, what a better way to conclude the series than by convening investors on COP29’s finance day 

A few comments before I hand over to the experts 

The UK impact investment market has shown remarkable growth. According to the newest research the market was £76.8 billion by the end of 2023, with a strong 10.1% compound annual growth rate (2020-2023). This is particularly impressive given the flat lining of broader UK assets. 

Private equity and venture capital are described as being "at the heart" of impact investing in the UK, providing the platform for broadening what impact investing can achieve. You are all among the leading impact investors in the market today, alongside social investors and foundations.  

The performance data from the Institute’s research is compelling: 68% of UK impact investors reported financial returns that outperformed expectations, while an impressive 88% reported impact performance exceeding their targets. This demonstrates that impact investing can deliver both financial returns and meaningful social/environmental outcomes.  

The UK stands out as a true centre of excellence through its comprehensive ecosystem: bringing together academics, a policy framework supporting both capital supply and demand, and a history of market development dating back to 2000. The UK represents approximately 8% of the global impact investment market, making it one of the most established markets alongside the US. 

There have been promising steps forward from the UK government and regulators, signalling interest in harnessing the power of impact investing to catalyse action on its missions, including announcing a landmark move in the development of a Social Impact Investment Vehicle in the latest Budget, and I look forward to the Chancellor’s speech in Mansion House tonight. 

So, there is an opportunity now for a global leader to build the next stage of the impact investing ecosystem and display what good can and does look like. As a sector, the value of impact investing is well understood, especially as a tool for catalysing positive solutions to societal challenges.  

So, we are called upon to embrace the transformative opportunities arising from what has been described as a “megatrend” in investment, with a 2029 of $1trn possible – as someone once said, “the harvest is vast”! 

So, in conclusion, we need to scale these efforts, share best practice, and ensure it remains a high integrity market, delivering tangible positive outcomes. The UK has the potential to build on its strong foundations in impact investing to drive such scaling efforts globally, and you can be part of that collective effort. 

I wish you a stimulating, inspiring and encouraging morning.

Thank you, 

Robert Hughes-Penney