ZAHARA MALIK FEATURES Fortunis Capital IN ARABIAN BUSINESS GLOBAL
Zahara Malik: Strong returns and making an impact are not mutually exclusive
In the age of Covid, many VCs are looking at finding ways to put their money where their values are says Zahara Malik, CEO & Co-Founder, Grosvenor Capital. In an article for ArabianBusiness Global she highlights how, as a venture impact investor, Fortunis Capital are at the cutting edge of that movement.
Over the last few years, it’s been clear that venture capital investors are beginning to recognise that a return on investment and making a positive impact on the world don’t need to be mutually exclusive.
The false disconnect between profit and purpose is narrowing as entrepreneurs apply new technologies and create investment propositions capable of delivering both. You can make money and make a difference at the same time.
As the COVID-19 pandemic and the resulting economic downturn has created new realities for many, the global investment community is uniting to overcome the complexities of the pandemic. Due to the ongoing economic, human and financial institutional pressures the need for VCs to invest in creating a global impact has increased.
VCs and their portfolio companies are starting to see how they can play a vital role in improving society in a multitude of ways.
Justin MacRae, COO of Fortunis Capital, commented recently that “in the current climate, consumer and investor demands are rapidly evolving and they see value in ethical investment in companies with purpose and salience”.
The pandemic forced many of us to self-reflect and to seriously consider what is important to us. Impact investing is at the forefront of what I have been trying to drive in the region through Grosvenor Capital, shaping an important new narrative about what is achievable in the investor community.
A key reflection has also been the genuine power of partnerships. Grosvenor Capital, for instance, recently joined forces with Fortunis Capital to be their conduit for the GCC region to further innovate the VC space, with a core focus on creating a global impact.
Fortunis have selected the top 20 investment opportunities from around the globe to be developed in the UK, prior to international expansion including the UAE and wider GCC.
They are supported by the UK Government with co-investment and are a UK Home Office Endorsing Body, with the authority to endorse and bring foreign innovation and talent from abroad, into the UK’s highly innovative VC arena.
In one of our brainstorming sessions recently we drew three key insights as to why venture investing is inherently impactful and how it aligns with the region. Here are the key outcomes:
1. The principles of impact are embedded in the UAE and across the GCC
The Investor Watch report by UBS Global Wealth Management conducted a study with over 5,000 high-net-worth individuals (HNWIs) across 10 markets – including Germany, Hong Kong, Singapore, Switzerland, UAE, United Kingdom and the United States – found that the highest rates of adoption in sustainable investing was found in the UAE.
The report highlighted that 93 percent of UAE investors believe they are not giving up investment performances by choosing a sustainable or impactful investment mandate.
Investors in the GCC region are far more engaged in impact investing and that within the next five years (2019-2024) one third of the average family office portfolio will consist of impact investments.
Therefore the values of impact clearly exist. As Sir Andrew Ross BT, Director of Fortunis Investments. Stated: “The GCC region is spearheading the impact investing narrative in the region and as we continue to develop and grow we are keen to ensure that the GCC plays an integral part in creating our impact driven legacy.”
2. Empowering the entrepreneurs within the start-up ecosystem
The UAE start-up ecosystem is driven by empowering its entrepreneurs. Start-ups are driven to solve problems and create value in sectors that need innovation or have typically been neglected.
This is fundamental to the success of modern economic systems and societies. Clementine, a key innovative portfolio company within Fortunis is determined to reshape the wellness-tech space through its virtual hypnotherapy sessions for women who are struggling with sleep, confidence or anxiety.
According to the World Health Organisation (WHO), globally, an estimated 264 million people suffer from depression, one of the leading causes of disability, with many of these people also suffering from symptoms of anxiety. Thus, the solution that Clementine offers, coupled with the UAE start-up ecosystem as well as the regions commitment to supporting mental health particularly during the pandemic could prove to create huge tangible impact.
3. Boosting market productivity
The VC space is known for allocating an underutilised resource to untested business ideas, primarily in areas of the economy where there is a great opportunity to drive technological change, progress and value as demanded by market forces. This results in an increase in productivity, employment and returns, both for the investors and the economy, thus tangible impact.
For example, another Fortunis portfolio company, Karma, is a leading UK tech platform consisting of employers, retailers, employees and consumers enabling them to transact and solve each other’s problems and allowing all of them to take back value from the system seamlessly.
Karma’s mission is to rid UK of the unsecured individual debt problem which currently stands at £340bn by making funds available with no interest costs, fees or hidden costs and at the right time – which are the fundamental reasons for spiralling individual debt. Their vision could easily be replicated and adapted across the globe to ensure we break the cycle of poverty and to ultimately boost the given markets productivity.
As venture capitalists start to integrate the dimension of impact into their evaluation process of portfolio companies, we are certain that by joining forces around the globe we can collectively accelerate the impact narrative by innovating our current funding models.
o If you are an investor who shares those values and would like to find out more, email info@fortuniscapital.co.ukor call +44 (0) 203 603 0177