“We need to be willing to embrace the new”

28 March 2024

Idgar van Kippersluis is a passionate impact investor and is about to become a PYM ambassador. He started his career in management consulting and subsequently founded a hands-on private equity business. After almost twenty years of managing that business, he decided to step down as he became increasingly interested in creating more environmental and societal impact. His mission is to combine the power, dynamism and innovation of our capitalist system with more sustainability, equality and fairness.

How did your impact journey start?

I had worked in private equity for many years, but I also had been interested in the impact world for some time. So when I came across the Wire Group at the right time in my life, I started investing in their fund of funds. It gave me a great overview of the opportunities and possibilities that impact investing had to offer. At about the same time I also became involved in setting up an impact investment club for MBA students at INSEAD, and I joined the IC of their fund. This immersion led me to learn a lot very quickly about the impact world. 

What has been your most successful investment so far?

I have been actively involved in impact investing for more than three years now and I think it is still too early to identify clear winners, although some funds are doing very well, such as AquaSpark. A few direct investments I made that looked promising unfortunately did not materialise. It was helpful nonetheless because it taught me to diversify even more and focus on funds.

How has your background in finance shaped you as an impact investor?

I think I focus more on the business model and numbers behind the story and am certainly a bit sceptical, especially when I see investments that rely (too) heavily on beautiful anecdotes and photos. 

How could the (positive) principles of private equity apply to impact investing?

Currently, impact investing seems to consist almost entirely of venture capital. Financing promising new ideas that - if successful - will have an immediate positive impact. This is where impact and financial returns merge very easily. However, what we don’t really see is 'impact private equity’; impact investing that focuses on transforming existing, non-impact companies towards greater sustainability and fairness. I think this is because it means dealing with trade-offs. Decisions that lead to higher costs and lower cash flows in the short term, but - if all goes well - also lead to greater appeal to customers and employees in the longer term, and therefore also to higher value. This is a lot more complicated and less practised and proven, but I look forward to seeing more of this kind of impact investing in the future. 

What is the advantage of a fund-of-funds?

A fund-of-funds can be interesting for various reasons. You immediately achieve a high degree of spread and therefore lower your risk. It also allows you to learn more about different working methods and focus areas of various funds. On the other hand, you do add an extra layer of costs, which can slightly reduce your returns.

Learn more about investing in funds-of-funds at our online Investor Table with Idgar on April 3rd!

As an impact investor, what are your thoughts on philanthropy?

There is a spectrum between pure philanthropy on the one hand and investing for maximum return on the other. For example, I support several purely philanthropic projects in the cultural sector and more recently started supporting the School for Moral Ambition Foundation. These are more obvious philanthropic initiatives, but sometimes the lines are a bit more blurry. I have also made a few investments purely for impact, where I consciously accepted a much higher risk of no financial return. I think it is important to know where on that spectrum you are with every investment so that you can adjust your expectations accordingly.

How do you see the future of impact investing?

Big system change requires a lot to happen at the same time. Impact entrepreneurs with innovative ideas are important, but they will not move the needle by and in itself. You also need supportive policy-making and a certain mindset among consumers. They need to be willing to embrace the new. This requires all of us to think more broadly, and beyond our immediate short-term interests. 

I think the future is all about taking the longer-term interests of a large variety of stakeholders into account. I also think we need to convince more people to invest in impact, as well as attract more institutional investors. For this to happen at a larger scale, we need more robust and transparent data: for example, we need to show what financial returns different impact funds have shown, and what measurable impact they have achieved.

How does a network like PYM contribute? 

At PYM, it is clear that everyone is sincerely dedicated and committed to bringing more capital to impact. This is achieved by getting more people interested in impact and by allocating bigger chunks of their assets towards it. I wholeheartedly stand by PYM’s mission to expand the field of impact investing, so I look forward to being part of it as one of their ambassadors. 

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