Deval Patrick and Greg Shell of Bain Capital Double Impact, at the Bain Capital Boston Office
Q: Why launch an impact investing fund at Bain Capital?
A: There are a few things that make this moment ripe for impact investing and interesting for Bain Capital. First, we’re seeing demand from investors who want their money to express their values. This is especially true of Millennials, who simply expect more from the companies they buy from and invest in, and who will receive the greatest wealth transfer in history over the next 20 years. Second, we’re seeing more evidence that companies with a social mission can be very successful, and can deliver attractive returns to investors. An increasing number of studies are showing that investments in mission-driven organizations and funds can deliver market-rate returns. And third, Bain Capital—because of our team, our broad platform and our value-added approach—can play a unique role in helping impact-focused businesses to scale. We’ve seen that there are more early-stage seed and venture investors in the impact field than there are growth-focused investors, and we think we can play a unique role as companies look to scale.
Bain Capital has always believed in doing things a little differently. We pioneered the value-add consulting model in private equity, and our teams have experience working with mission-driven portfolio companies like TOMS, Sundial and Beacon Health Options1. I think that we’ll continue to deliver on the company’s commitment to create lasting impact for our investors, our portfolio companies and our communities through Double Impact.
Q: What kinds of companies are you looking for?
A: We are looking to invest in companies that are poised to deliver both financial and social impact. We believe that companies with a social mission can be very successful, whether it’s because they’re providing products or services for customers that have traditionally been ignored, because they’re developing new technology that saves on costs like energy or water, or because they’re operating in areas that have been undervalued. In general, we’ll look for companies focused on sustainability, health and wellness, and community building that we think can deliver commercial rates of return while fulfilling their social missions.
Q: How will you measure social impact?
A: We will focus on social impact in our pre-investment diligence process and in our post-investment engagement with our portfolio companies. We’ll screen companies that are in our target areas of sustainability, health and wellness, and community building on a number of measures. These measures will include the company’s ability to produce scalable outcomes for underserved populations, the intrinsic alignment of the company’s social mission and potential for financial returns, and the company’s ESG policies and procedures. We will also filter for companies that would benefit from our capital and expertise.
Once we make an investment, we will benchmark each company’s social impact. We will then work with the company to build social impact goals and metrics into every Strategic Blueprint. We will use B Analytics to benchmark and track the social impacts of our portfolio companies, and we will also seek a GIIRS rating for the fund.
Q: How will you define success for the Double Impact Fund?
A: I hope that Double Impact will become an example for those of us that want to show the world that doing well and doing good are not mutually exclusive. We will be successful if we make smart investments in companies that scale because their products or services solve problems in a way that is market-based and sustainable. And we’ll be successful if we can provide our investors with market rate returns that demonstrate that mission-focused for-profit companies can grow and thrive in today’s market.
Q: Why is Double Impact interesting for you?
A: I had known the team at Bain Capital for many years, and I had admired their success in investing as well as their commitment to supporting communities in Boston and around the world. My sense was that the people here really did think about the long-term impact of their investments. Thankfully, that’s proven to be true, and I think we’ve built a very talented team for Double Impact who will live up to the values of Bain Capital and identify strong mission-oriented investment opportunities.
For me personally, my upbringing and my career path have both contributed to where I am today. I grew up on the South Side of Chicago, and I was the first in my family to go to college. I have had careers in law, in the private sector and in the public sector that many have said were improbable, given where I came from. It may also seem improbable to some people that business can lead on solving social problems, but I believe that we’ll be able to invest in companies with scalable solutions and profitable business models.
But, I’ve always been an optimist, and I believe that impact investing represents what’s best about how business can help to unravel some of the problems that so many of us have been working to solve in the public and nonprofit sectors. As Governor, I led a number of initiatives that brought the private sector into the business of creating positive social change, so joining this incredibly talented team was a natural next step for me. I look forward to working with the team here to show that companies and funds can do well by doing good.