By Bonnie Chiu, Managing Director of The Social Investment Consultancy

A U.S. study from 2021 found that only 1.4% of assets are entrusted by investors to asset management firms owned by women and/or minorities. Regulated financial intermediaries can play an important role to influence and channel capital towards a more inclusive future. As we celebrate the 2nd anniversary of gaining financial regulatory approval, the imbalances in the financial system continue to weigh on us.

When we learnt of the Partner programme between Investing for Good and Esmee Fairbairn Foundation, aimed to bring more regulated financial intermediaries as Appointed Representatives into the market, we saw it as an opportunity to expand our service offerings as a consultancy, and to deepen our own impact on the impact investing ecosystem. Two years on, not only have we achieved these aims, becoming a regulated intermediary also spurred other opportunities.

One opportunity is that we started making our own impact investments – out of our company’s balance sheet. This is not strictly a regulated activity, so we could have done it before gaining regulatory approval, but gaining the approval gave us the confidence to do it. The compliance processes required to maintain our regulatory license, meant that we started putting better financial management processes in place that supported with building the in-house investment capabilities. During this time, we also benefited from an OnPurpose placement, Suzuka Jomori, who brought a decade of experience in corporate banking into TSIC. We have made working capital loans to a female entrepreneur, a female fund manager, and an impact-linked loan to a non-profit focused on women’s empowerment (to be announced in more details soon!). As only 14% of angel investors are women in the U.K., we are proud to be a women-owned firm that also makes some impact investments.

While the regulatory license is only applicable to activities within the U.K., it is also recognised as a ‘mark of confidence’ by overseas stakeholders – and as a result, it has opened us up to more enquiries from impact investors globally. We have especially worked a lot more in Asia, such as the report on catalytic capital with 200 Million Artisans, and an ongoing project with Indonesia Impact Alliance, became tangible. From a personal perspective, gaining the license and becoming recognised as an ‘Approved Person’ certainly boosted my own confidence, especially handling the more technical aspects of impact investing projects, such as structuring investment products.

Becoming regulated also coincided with accelerated developments at the Pathway Fund, a new impact investment wholesaler focused on racial equity. Co-founded by myself, Stephen Bediako and Kunle Olulode, TSIC continues to provide hands-on support during Pathway Fund’s pilot phase. The partnership with Investing for Good has definitely given us confidence to embrace blended finance as a concept. At Pathway Fund, TSIC has helped design programmes, which deploy grant funding to catalyse investment capital towards Black and Minoritised-led fund managers. TSIC also co-led with EIRIS Foundation to create the Racial Equity Scorecard, an initative of Pathway Fund, which assesses public market investments on their racial equity performance. We foresee more product creation opportunities based on what we have built together with the Pathway Fund.

This time last year, we celebrated our 15th anniversary at TSIC. We have accomplished a huge amount in the past 12 months, and I’ve been most excited by our progress on impact investing.