“If you have an investment portfolio or a pension, this year has been gruesome… the worst year since at least the 1980s”
— The Economist Magazine
A recent Financial Times article warns in large bold type: “EU top diplomat warns of global recession.” This comes as a result of central banks around the world tightening their monetary policies — the most aggressive since early in the 1980s. Looking back, that was when our founder, Janet McKinley, shifted from working at a major global industrial corporation, to a position as a research analyst/portfolio manager at one of the largest global investment firms in the world. We bring this up because we are always going to face new challenges and the pendulum will continue to swing.
The founding of Advance Global Capital Ltd came on the heels of a US stock market characterized by “liar loans” and “bets on bets”. Janet’s goal was to launch a firm and a fund determined to provide patient, flexible working capital to SMEs, many of whom do not have the support of banks — especially when the SME is owned by a woman. Our relationships with the intermediary financing companies with whom we partner are critical to achieving our goals.
As a fund manager, we need to be flexible on how we move forward while always focusing on our mission of providing responsible capital to SMEs. Our aim has always been to put investor funds to work effectively and efficiently. Our fund appeals to investors who value investing for the long-term, who value decent stable returns, and who value the impact.
In other news, Sudha Bharadia (Co-CEO) and Sam Miller Hicks (Chief Impact Officer) attended the largest in-person global gathering of impact investors at the GIINForum22 at the World Forum in The Hague on October 12th. The conference was attended by over 1,500 delegates representing over 65 countries and was a great opportunity to connect with like-minded individuals all working together to drive continued momentum in impact investing.
The GIIN network estimates that over 3,000 organisations collectively manage over $1.164 trillion in impact assets under management, and the industry is ever growing. Sixty-three percent of these organisations are fund managers managing an average of $485m. AGC is very proud to be a part of the GIIN network. Our fund, currently with an AUM of circa $163m, is relatively small. But we pack power. So far since inception, we have been able to support over 26,000 SMEs globally, and advanced over $5bn in working capital. There is a huge multiplier effect to the work that we do and none of this would be possible without the support of our investors.
Calvert Impact Capital invited Sam to speak on a panel at the conference on the topic of shifting power dynamics focused on incorporating stakeholder voices to transform investments. Investors hold tremendous amounts of power and privilege — the discussion centered around how stakeholder voices can be incorporated at each stage of the investment process. For us at AGC, that means having intentional impact show up at every stage — from investment strategy and portfolio construction through to due diligence and selection, and, importantly, exiting investments in a responsible manner.
As most of our institutional investors know, at AGC we are extremely transparent and open about the work we do. We provide detailed investor reporting often going into the weeds of our portfolio which is appreciated by investors who need to do on-reporting to their own stakeholders. We take huge pride in the high standards of investor servicing and reporting that we apply.
With US Fed rates increasing and the dollar continuing to strengthen, capital is leaving emerging markets — the very markets that need our help in these times of high rates and high inflation, exacerbated further by the hike in energy prices. Our mission at AGC is simple — we have to do more to support these businesses. They need more capital. And now is the time for impact minded investors to step up.
As always, if you have any comments, suggestions or concerns, please do not hesitate to contact Sudha Bharadia, Co-CEO at firstname.lastname@example.org.