Dear Shannon: How can I make a career switch to impact investing?
Dear Shannon: How can I make a career switch to impact investing?
I've been with a fund management firm in London for the past five years since graduating from a master's program. While I enjoy my job function and the day-to-day buzz of being in "The City," I'm becoming increasingly disillusioned with the purpose of my work. I think I've fallen out of love with making money. I took a three-month sabbatical last year to volunteer in East Africa and loved it. While I don't think I want to change careers completely and work in international development, I would like to try something new. Any ideas?
Consider this a friendly slap on the back for having the courage to look beyond your bank balance and follow your heart. It takes guts to admit that you're no longer satisfied with your career choice, and frankly, as a fund manager you may feel like you have more to lose than others who are perhaps earning less. But it's important to remember that you also have so much to gain: fulfillment, passion and that elusive sense of purpose you seem to be missing right now. As you likely know, these can't be bought.
That's why in this month's column, I'll help you imagine a future in which you are living and working closer to your values and, from there, outline the kind of steps you can take to start moving in that direction right away and, with a bit of luck, reverse some of that toxic disillusionment you are experiencing in your professional life.
Swapping 'more' for 'better'
Because you're still motivated by the pace of life in London's financial district, "The City," and enjoy the day-to-day tasks of your job, think about holding on to your job function and instead switch the focus to something such as impact investing. This type of socially responsible investment earns more than just profit. Impact investing harnesses the power of enterprise to earn additional benefits for people and the planet. As Margot Kane puts it, it brings a different set of calculations to your investment decisions so that social or environmental good is included. For the people lining up the deals, the bonus is feel-good kudos.
Those looking to forge a career in this new and exciting area require financial know-how and savvy business intuition to crunch the hard numbers on the viability of an organization, fund or company, and ensure a financial return like any traditional investment. But impact investors also need a compassionate heart to generate the measurable, beneficial returns on social and environmental impact. You can do this by using your financial skills to provide capital to diverse worldwide initiatives in areas such as sustainable agriculture, affordable housing, accessible healthcare, clean technology and access to financial services, according to the Global Impact Investors Network.
The client pool is diverse and includes passionate individual investors keen to support a cause they believe in and, in some instances, non-accredited investors with as little as $20 to put in. Take the Calvert Foundation's Community Investment Note (PDF), for example, through which people can participate through online broker Microplace for less than a round of drinks. Ours to Own is another project seeking similarly humble investments to make major changes to the "cities we love." It's a whole different ball game from what you are used to in The City.
Invest in your own impact
So how do you move from the traditional finance sphere into an impact role? And what kind of skills and traits will you need to successfully make that transition? Below I've set out my top tips for landing yourself the kind of dream job that allows you to make a difference while making money.
There are events, mailing lists, webinars, LinkedIn groups and news stories that you should be reading, joining and attending, so first things first to get connected. The GIIN is a good place to start — it has weekly emails and events that bring people from all over the sector together, while organizations such as Acumen Fund, Rockefeller Foundation and ANDE (Aspen Network of Development Entrepreneurs, a group with a particularly diverse membership base) are also worth following and reaching out to through your LinkedIn network to see if you know anyone as first or second connections in any of them.
Get up to speed
Impact investing is evolving rapidly and becoming increasingly diverse. As a new player in this field, you need to appreciate the nuances. This means doing your homework to fully understand the approaches, structure and specialties within the sector. Now more than ever, this understanding is crucial: there are unusual forms of exit and, as FastCo's useful blog on the subject insists, even the "basic definitions of 'returns' and 'capital' can have different meanings among proponents and between different firms." The takeaway? Make sure you're clear on how your fund-management skills could translate for the different approaches or structures.
Given all this newfound, woolly diversity, it's important that you define your niche as much as possible. Are your passions in the developing world or closer to home? In environmental issues such as water, biodiversity and energy or more on the social side of the fence in health, gender or education? Get specific if you want to make maximum impact. Casting your net too wide works against you, especially when making a career change. The hiring manager you may network or speak with will want to know what your specific target is, and what the audience that you are selling your unique skillset to is.
Get networking, and nurture
A successful career in impact investing will require you to understand clients' financial needs and values, and connect them to impact investment opportunities that make sense. Make sure you're mining the richest seams by building a strong network: hone your personal branding and marketing tools, reach out to the community and strengthen your connections with colleagues, clients and customers. Nurturing them is sure to reap rewards. Julia Matsudaira of Goldman Sachs is certain that organizational and business success rests on the strength of your relationships: "Strong relationships are based on trust," she said. "Personal finance is often a private and intimate matter that requires wealth advisors to not only be skillful in financial management, but also trustworthy, to uphold their fiduciary duty." This applies to impact investing as well.
Dedication is the key to success, but passion is the door
Why work for profit alone when you can work for purpose too? Your masters career advisor may have thought differently, but pursuing your passions is not frivolous. In fact, it's the only way to ensure a sustainable career — one that satisfies you on every level, and one that you can imagine doing for a long, long time. Impact investing holds many opportunities for someone with your financial and investment skillset. Now you’ve got to do your homework, find your niche and reach out to your networks. What are you waiting for?
If seizing your goals and living life with purpose and passion seems like an insurmountable challenge, contact me for some bespoke advice on careers in impact investing and converting your resume for your translated skills story.
Top image by Syda Productions via Shutterstock.