Capital Markets Heading for Value 2.0

by Dr. Maximilian Martin
Dec 17, 2015 12:30 PM ET

“Impact Investing is still a small part of the capital markets. But the returns on these investments are good enough to attract vastly larger amounts of capital. And governments, through financial and other incentives, can further encourage the allocation of capital to investments using environmental, social and governance criteria.”

—Robert Glauber, Harvard Kennedy School of Government, former U.S. Under Secretary of the Treasury

The financial crisis called into question business as usual. The notion of safe assets is gone. Many see financial markets as “casinos” instead. There will be an estimated USD 900 trillion in financial assets by 2020, representing claims against about USD 90 trillion/year of global GDP. The figures are so large that even transformational initiatives in relatively large developing countries, such as the total estimated USD 75-79 billion cost of Ethiopia’s Growth and Transformation Plan (GTP) currently underway, can seem like small change.

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Maximilian Martin is the Founder and CEO of Impact Economy. His investment and advisory work has helped define the trajectory of market-based solutions and the impact revolution in finance, business and philanthropy. Dr. Martin created Europe’s first global philanthropic services and impact investing department for UBS and the UBS Philanthropy Forum. In 2013, he wrote the primer on impact investing “Status of the Social Impact Investing Market” for the UK G8 policy makers’ conference. His new book “Building the Impact Economy” shows how to reconcile responsibility with opportunity and seize the multitrillion-dollar opportunity in the wings.