‘Impact-investing not about moving capital around’

In less than a decade, Rekha Unnithan invested $1 billion in a niche part of the market that was once so small most people on Wall Street hadn't even heard of it.

Unnithan is co-head of impact investing at Nuveen, which oversees more than $1 trillion of assets, including over $5.8 billion in impact strategies. She joined the firm in 2012 to develop a business for investments that can both make money and leave a measurable positive impact on society and the environment. Just last week Nuveen attracted $150 million from institutional investors for a strategy focused on combating income inequality and climate change.

Yet for all her success, she cautions against what she sees as reckless growth. That's a prescient warning as more and more managers pile into her growing enclave.

"Impact investing is now all of a sudden having its

Rekha Unnithan

moment," said the 38-yearold Unnithan. "It's cool now and is getting a lot more attention. We must be very mindful though that this is done correctly to actually have impact as opposed to just moving capital around and calling it impact."

Investments that are simultaneously socially and financially rewarding have a natural appeal at a time when the pandemic and racial unrest in the US have highlighted inequalities and heightened social tensions. Nuveen's investments focus on lowincome consumers' access to health care, education and housing, all of which can be prohibitive in a system that disproportionately favors those at the top.

Impact funds differ from so-called ESG investing by targeting specific outcomes, such as reduced carbon emissions or disease eradication, rather than simply avoiding companies that pollute or make cigarettes, or seek to persuade corporate executives to become more sustainable by adopting better governance practices.

Impact funds managed $715 billion at the end of December, up from $8 billion in 2012, according to the Global Impact Investing Network, or GIIN.

Nuveen says it made its first impact investment in the private markets in 1989.

New York-based Unnithan focuses on impact in private equity and real estate. Nuveen wrote a $31 million check to Mumbaibased Aavishkaar Group, which invests in startups and early-stage companies in sectors, including financial services and food processing in the emerging markets. —Bloomberg