Private equity is on the rise. In fact, some experts believe we’re in a private equity boom. The private equity market is worth trillions of dollars (yes, trillions!) In large part, private equity firms are focused on exciting technologies, some of them emerging during the Covid-19 pandemic. On the other hand, many firms themselves are looking to use technologies like artificial intelligence and machine learning to make better investment decisions.
Not only is private equity lucrative, but it’s also an exciting and dynamic field. So, if you’re considering a career in private equity, you’re probably not alone.
In a recent episode of The Intern Group’s podcast How to be the difference, Johanna and Paul sit down with Aisha Williams, the founder, and CEO of ImpactVest. Aisha is focused on investing in projects with a positive impact and says those projects aren’t sufficiently supported by capital markets.
Aisha believes that impact investing is the catalyst for change across all sectors. That’s why she decided to start ImpactVest. She believes that in just a few years, one-third of assets under management will be sustainable.
The future of investing is impact investing! Aisha aims to slowly change how impact investing is done, to direct funding into sustainable projects with measurable and tangible impact.
Get to know Aisha
Aisha is originally from Chicago. She started her career in the Foreign Service, where she was posted in South America, the Middle East, and South Africa.
During her eight years in the foreign service, Aisha was involved in many public-private equity deals. She explains her job as being the public face of the foreign service, and she says that’s where she first saw the power of private equity to make real change.
After her term in the foreign service was over, Aisha moved into sustainable finance and wealth management. There, she says she saw the challenges of focusing on the potential positive impact of investments and measurable outcomes.
Her passion for impact investing led her to found ImpactVest, where she brings her foreign service experience to impact investment.
That might seem like a drastic career change. To go from working for the U.S. Department of Defense around the globe to the private world of investment was of course a challenge, Aisha says. But it was the right move.
“You never know where your career will take you, you just have to follow your passions and it will always kind of lead you into the right direction.”
What is impact investing?
According to the Rockefeller Philanthropy Advisors, impact investing “seeks to generate social and/or environmental benefits while delivering a financial return.”
Impact investing is at the intersection of investing and philanthropy, and is a response to growing global issues that can’t be solved by governments and NGOs alone. And the field is growing every year. In the United States alone, the current impact investing market is valued at nearly $9 trillion.
Aisha describes a “spectrum” of investing. Of course, on one side of the spectrum, there’s traditional investing, where the impact of an investment is considered, but investors aren’t specifically focused on the outcome. Aisha worked in this type of investing during her time in the foreign service.
On the other side of the spectrum, there’s pure philanthropy. And impact investing is somewhere in the middle. According to Aisha, impact investing is one of the most challenging areas, because you need both a financial return, like with traditional investment but also measurable positive outcomes.
That makes it a difficult area to be able to practice in, she explains. Impact investing focuses on the impact of investors, as well as how companies influence the environmental and social impact of their activities. There’s also a third layer here, Aisha explains, which is how environmental and social factors influence companies.
Impact investing has been around for a long time, but primarily in the public sector, where the focus on financial returns isn’t as high. Once you take things into the private sector, that’s where it gets difficult.
What impact looks like
Aisha has a lot of experience in the world of investments and shared a bit about what impact looks like, and what types of projects accomplish it.
One important element is the people involved, she explained. The people who are the most affected by an issue – whether it’s climate change or gender equality – are likely to be the best situated to find a solution, she said. Getting those voices up to the institutional level is one main focus area of ImpactVest’s projects.
The impact is often spoken about on a very global and institutional level. But Aisha says it’s really on the local level that we should be focusing on. She points to one project that opened childcare centers to help women get back into the workforce. Many of her projects focus on gender equality and climate initiatives.
Scaling local initiatives like that can be challenging, because they may be focusing on local, positive impacts, she said.
A lot of impact investing is changing the investor viewpoint on the timeline, investing and impact, Aisha explained.
“One of the most important things for me is to have a very diverse team,” she said. “You have to cover your blind spots.”
But despite the diversity of Aisha’s own organization, the field as a whole isn’t meeting the mark. “Impact investing is stalled because it is not diverse enough,” Aisha explains. Having a wide variety of viewpoints is essential, and it’s impossible to be successful without that diversity.
Advice for women in the investment world
The investment sector is predominantly male. Like other areas of the finance world, there aren’t many women at the top of the ladder. The lack of female financial entrepreneurs can make it challenging, Aisha says.
You have to really be yourself, she advises. Don’t compare yourself to other people in your field – that’s absolutely key
Aisha’s other piece of advice is that it’s important to be really passionate about the ideas you want to stand for as an investor.
“You have to have a bit of tunnel vision,” Aisha says. It’s essential to know where you’re going and to know your goals.
“As a woman entrepreneur, you really do have to be focused on your goals and know where you are going, because it can be a bit lonely seeing no other women entrepreneurs.”
And finally, Aisha shared her top tip for those who want to follow in her footsteps.
“This is the most important tip I have, don’t be afraid to walk your own path, and other people will follow you”