Role & Organisation:
Harry Breidahl is Investment Manager at For Purpose Investment Partners.
What was your first job?
After the classic paper run, my first “real job” was in my gap year after high school driving around Perth dropping off and collecting party hire equipment. Lifting wooden tables onto trucks on a scorching summer’s day made me pretty excited to go to University, that’s for sure.
When did you know you wanted to work in finance/business?
I wish I had a good answer to this, but my first foray into business was really a combination of process of elimination and chance. I had imagined being a Doctor or Lawyer, but realised at the end of high school that my fears of public speaking, and blood, didn’t bode well for a career in either.
I’ve always loved maths, so in the end I decided to study Actuarial Science, but I found staring at mortality tables each day a bit morbid and so eventually switched into Finance and Economics. Most of the smart people in my finance class were talking about applying for internships in this thing called Investment Banking, so I thought I’d give that a go and one thing lead to another.
When did you first discover the concept of Impact Investing?
It was in early 2019 from memory. I was already familiar with the ESG investing trend but not impact per se. At the time I was working for a resources private equity group, and we had just been to the Democratic Republic of Congo for a mine site visit. That trip really kickstarted my thinking around changing paths into a career where I could connect the output of my work to what I cared about.
While doing some sneaky Googling waiting for our flight, I came across Sir Ronald Cohen’s “On Impact” and reading that really felt like a personal call to arms. It was also around this time that my long time mentor and friend from my banking days Alex Debney joined Matt Tominc at what is now Conscious Investment Management, which made a job in Australian impact investing seem more tangible and less of a pipedream!
What’s one exciting development you and your team have in the pipeline?
The back end of last year was spent focused on fundraising for our Social Impact Fund I, and with our first close behind us the exciting part is we now need to source the best impact investments we can find to deploy that capital. Our Fund’s first investment will be into a specialist disability accommodation (“SDA”) partnership with NSW-based Tier 1 community housing provider BlueCHP, building on their experience gained from the Hunter Residences Program, the single largest SDA project since the creation of the asset class.
While most of your audience will be familiar with SDA, and have likely seen many other managers raising funds for SDA strategies, we believe this partnership is unique in its focus on building customised homes co-designed with the tenants, vs. the more common “build it and they will come” approach. We’re really excited about the impact that this partnership will have, focusing on the lower funded categories of SDA like robust housing, and are also thrilled that as part of the transaction NHFIC will be making what is hopefully their first of many investments into disability accommodation.
What was the most interesting impact deal (from any team across Asia/Pacific) in the past 12 months?
It might not be the most headline-grabbing impact transaction that has taken place over the last year, but the Foyer Central Social Impact Bond is the one I have been most impressed with. Social impact bonds have their pros and cons, with the naysayers often pointing to the effort required to get one off the ground.
I believe this bond, a partnership between SVA, Uniting, SGCH and NSW Department of Communities and Justice, took close to 7 years from start to finish, an impressive story of persistence by all parties involved. This type of project is exactly what social impact bonds are designed for – funding intervention programs that, if successful, will deliver significant savings to the government well beyond the cost of the intervention, enabling investors to make a return that compensates them for their risk capital. The impact the Foyer program has is hard to beat from all the projects that we have looked at, and this investment will truly transform the life trajectory of the out-of-home-care leavers it supports.
Name one high impact company (globally) that investors should keep their eye on?
In my view, one of the most concerning looming crises alongside the climate crisis and growing income inequality is the significant displacement of jobs due to automation. A 2017 McKinsey report on the subject estimated that by 2030, between 400 and 800 million jobs globally will be displaced by automation. Most of these jobs lost will be in relatively low-paying industries, for example truck and ride-share driving, compounding the income inequality and corresponding affordability issues that are facing the world today. Policy will play a significant role in helping to retrain these displaced workers and get them back into the workforce, but private capital will need to do its part too.
Where there is a significant problem, the spoils from solving it are usually also significant, and that’s why I believe that profit-for-purpose organisations looking to tackle this problem such as Forte are ones for investors to keep an eye on. Forte’s model is essentially an impact bond-equivalent where investors fund the costs of the re-training and are repaid based on tax savings to government once these people return to the workforce.
At a domestic level, our portfolio company Catalyst Education which we acquired nearly a year ago is also tackling this issue, providing high quality vocational training in areas with significant current and projected workforce need such as early childhood education and aged care.
What’s your vision for impact investing in 5 years time?
I think an optimist would say for impact investing to just be “investing”. As more of a pragmatist, and considering how hard it has been for the pioneers of impact investing to get it the recognition it has today, I would like for impact investing to have proven it can match it on returns with investments that make nil or negative social impact, shaking the view of it being “concessionary” that still pervades today despite plenty of evidence to the contrary.
I’d also hope for the industry to have nailed the crucial impact measurement and reporting piece of the puzzle. Finding a globally accepted, transparent approach free from subjective inputs is the holy grail we’re all working towards and hopefully something not too far away.