One of the key problems for those trying to attract investor interest in the burdgeoning world of impact investments is a lack of liquidity. As the sector matures and the quality of investment opportunities improves, the lack of a secondary market facility for these investments becomes more and more critical. But this month sees welcome news and a step (or rather two steps) in the right direction.
Citylife has teemed up with Sharemark for the distribution of the East London Bond and Sharemark are providing secondary market liquidity for the bond offering. And the Social Stock Exchange is launching its new £2million capital raising for the development of the Social Stock Exchange. So all good news.
Except that every time secondary markets are mentioned, there is a small voice at the back of my mind that asks "what exactly are we trading, here?" Should we not be trying to get investors to trade up on the basis of impact rather than down and up and down and up on the basis of price?. I am very happy to be wrong about this - so please tell me if you think I am!