The Impact Investing Boom On Business School Campuses

A STIFLED JOB MARKET?

It’s demand that seems to be hobbling the industry’s development. “There just aren’t that many jobs out there,” Gray asserts matter-of-factly. While Reed was essentially able to pick up where she left off after her MBA, that’s certainly not the case for all graduates — especially those coming from the nonprofit or social sectors. “Their experience is very relevant, but they can’t say they’ve done banking or some other finance job before school,” Reed reasons. “So the question always becomes, how can I show my potential employer that through my finance classes at business school I am a good candidate?”

Zeina Fayyaz knows what Reed is talking about. The 27-year-old freshly minted Berkeley-Haas MBA boasts an impressive resume. After graduating from Harvard, Fayyaz went to work at Boston-based nonprofit Root Cause, quickly working her way up to accelerator manager, where she built a portfolio of nonprofits and, later, social enterprises that received $10,000 grants and consulting from her. As Fayyaz was introduced to social enterprise, she became increasingly interested in impact investing as a way to achieve greater scale and increased sustainability.

To be sure, her time at Haas was valuable. “My idea of impact investing was much more hazy and conceptual than anything else,” the Stamford, Connecticut native admits. “I never would have been to exposed to as much as quickly without the MBA.” And yet, here she is about a month after graduation with a couple of consulting projects but no full-time employment. Admittedly, she turned down one offer and has been geographically “choosy,” but defending her investing prowess has also been a hurdle. “It’s a harder case to make than I anticipated coming in. And I did everything,” Fayyaz says.

Indeed she did. Fayyaz flexed the muscles of Haas’ robust extra-curricular offerings. She interned at Goldman Sachs last summer. Fayyaz even spent the past spring interning at San Francisco-based impact investing firm Sonen Capital.

The explanation seems simple to Reed. “There just aren’t that many jobs compared to the people who express an interest in impact investing,” she says.

Bouri concurs, albeit in a bit more optimistic way. “The supply and demand might not match in all places, but for those talented individuals who have the right blend of skills, there is a lot of room where they can develop as professionals and have a huge impact on the world,” he says, noting the GIIN Job Board.

MBA CRITICAL BUT NOT NECESSARY

Meanwhile, Patrick Sagisi, an associate at leading impact investing venture capital firm DBL Partners, was surprised to hear that some MBAs struggle to find a place in the impact-investing universe. “It’s a big umbrella with a lot of people under it,” he notes. Sagisi, who holds an MBA from Stanford’s Graduate School of Business, suggests a potentially overwhelming abundance of opportunities. “The challenge coming out of business school is figuring out where to focus your efforts in a particular field, sector or activity and just going after it,” he says.

Even with a nonprofit background, Sagisi believes the MBA holds special value among potential impact investing employers, especially within his own office. “We think having an MBA is a critical part of having the skills in understanding businesses and business models in order to be an effective investor,” he says, noting it’s certainly not the only requirement. A policy background is particularly attractive for his firm’s portfolio of clients in the energy space, he adds.

Reed says that at Cambridge Associates, the MBA is viewed as attractive but not necessary. “In general, do I think an MBA is required to work in impact investing? I think it’s becoming increasingly necessary. Because the space is becoming increasingly competitive,” she says, adding that she doesn’t want to see impact investing “go to a place where we only have ex-bankers working here.”

Ex-bankers or not, impact investing is gaining increasing attention from within and outside business school campuses.

“When people like Bill Gates and even Warren Buffet talk about how capitalism has created the externalities that are causing so many problems — wealth and income inequality, environmental degradation — you have to question the system,” Weatherley-White insists. “And I’m not saying it’s all messed up and capitalists suck. I’m not a socialist, I’m a capitalist. But you have to question it. And that’s the beauty of impact investing. Is it really enough just to be focusing on the financial short-term? And I think the answer collectively is … maybe not.”