Liquidity is the Missing Elixir in Impact Investing
Ben Smith and Harvey Koh
In a new commentary for Stanford Social Innovation Review, C3’s Harvey Koh and Ben Smith from the Paul Ramsay Foundation discuss how illiquidity across asset classes constrains catalytic capital and other impact investments.
“Market dynamics appear to present a perfect storm working against impact: an inherent bias towards long-term illiquidity, regulatory discouragement, and struggles to exit within the broader market,” they write. But they also point to new structures and strategies that are emerging to address these challenges, including secondary funds and publicly listed vehicles.
“For impact investing to move from the margins to the mainstream, liquidity constraints must become a core design consideration for impact strategies rather than an afterthought. Progress requires a combination of new structures, new thinking, and a broader—yet rigorous—view of how impact is defined and created,” they explain.
Liquidity is the Missing Elixir in Impact Investing
In a new commentary for Stanford Social Innovation Review, C3’s Harvey Koh and Ben Smith from the Paul Ramsay Foundation discuss how illiquidity across asset classes constrains catalytic capital and other impact investments.
“Market dynamics appear to present a perfect storm working against impact: an inherent bias towards long-term illiquidity, regulatory discouragement, and struggles to exit within the broader market,” they write. But they also point to new structures and strategies that are emerging to address these challenges, including secondary funds and publicly listed vehicles.
“For impact investing to move from the margins to the mainstream, liquidity constraints must become a core design consideration for impact strategies rather than an afterthought. Progress requires a combination of new structures, new thinking, and a broader—yet rigorous—view of how impact is defined and created,” they explain.
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