The (Social) Responsibility of Wealth

There is a recurring word in descriptions of Luciano Balbo: pioneer. A degree in Physics, an MBA at Bocconi, he spent twenty years in the venture capital and private equity business before founding Oltre, one of the first Italian venture philanthropy foundations. Ten years ago, he launched Oltre Venture to invest venture capitals in highly social impacting companies. He has been included in the Class of 2016 Influential Leaders made up by the Association to Advance Collegiate Schools of Business. «Influencing the future» he says «has been the goal of the last ten years of my career».

How did you move from venture capital to Impact Investing?
I had the ambition to put my skills and my network at the service of the collective interest. You can get both a financial return and a positive social impact: it is a powerful concept, but it's still in its infancy.

Is Impact Investing a no man's land between profit and non profit?
We do not meet extreme needs, we answer to market's needs. We are fully convinced that our companies must find traditional capital after the startup phase. In the early stage, the difficulty of the model makes the risk/reward ratio lower than the market average.

Is it important to overcome the distinction between profit and non profit?
I think so. The complexity of social needs requires the use of intermediate tools, there's no longer such a simple dichotomy.

Does Impact Investing aim to have a positive impact on entire economic sectors?
Yes, it does. Let me make an example. The Sant'Agostino medical centers based in Milan show that you can provide quality services with reduced waiting times and prices close to the fee of public medical visits. Our presence is influencing the price of other organizations, thus breaking the public vs private dichotomy. Today there is much talk about new technologies, but very little is invested in basic sectors: education, health, development. The result is the disaffection of the electorate toward the political and cultural elite.

Can we measure the value of social investments?
We need to, but it's not enough. What we really need are companies so big that they can influence the market. Microfinance has been successful not because of the social impact measurement, but because it has become a significant sector.

What else does Impact Investing need to grow further?
Ideas, entrepreneurship, money. And success cases. It is hard to attract talents and skills as long as the pays are low.

What about money?
There is plenty of private money. A small amount should be moved to long-term investments that do not promise huge short-term financial returns. There has been so much talk about corporate social responsibility. It is time to talk about wealth social responsibility.