More than 1,000 people were drawn to the streets of San Francisco last week to talk about social capital and impact investing. This was no random event. It was organized by socialcapitalmarkets.net for their SOCAP11 event. And I must say it was one of the more sophisticated events I've attended and spoken at.
Attendees were connected via intranetworks (pathable) to talk before, during and after among themselves and set times to meet. Indeed, technology was leveraged everywhere -- from a dedicated WiFi area to use of Vyou.com to upload video (so easy!).
The main themes of the conference moved beyond the general to the specific: Social enterprises pitched their businesses to investors, and investors spoke on panels about what they wanted out of their financial intermediaries as well as their portfolios. Financial intermediaries spoke about standardization, asset allocation and reporting.
In short, a fascinating world of business and finance was unveiled showcasing not only on the want of asset owners to do good with their money, but the ways in which they want to invest (and in what).
What struck me was the dichotomy that was quite apparent in the attendees and at the talks. There were small investors and small businesses looking for small amounts of money (think microinvesting via sites such as microplace.com and kiva.org), and then there were the big guns: fund managers and family offices looking to put millions to work through sector bets. From the founder of Craig's list (Craig Newmark) to the founders of eBay (Pierre Omidyar and Jeff Skoll), among many others, the high-net-worth class was represented.
Missing? The middle market. Fund managers at the high end have $2 million minimums or more. Microcredit operators are akin to the Sharebuilders of the world. What about the $100k or $250k, or for that matter the $500k investor?
"Neglected," as one former separately managed account executive involved in impact investing told me.
Independent FAs have a quick opportunity to step into this space (far more than their Wall Street colleagues who have to jump through hoops for selling agreements, approved products, and the like).
From what I saw, there are billions ready to be put to work. "The problem," as another executive told me, "isn't with capital, it's with deal flow."
In fact, there is too much money waiting in the wings and ready to flow into the space -- with no one to guide it, or places to put it.