08 Oct 2020
2020 has been a hugely transformative year for Pass the Keys, a product of LBS's distinguished Incubator programme
When Josh Bell joined the MBA programme he found many of his peers had a strong interest in impact investing and how business can benefit society as well as returning a profit. In answer to this need he launched the LBS Student Impact Investing Fund.
Two years later, he is handing over the reins to another generation of students (Amanda Barros Ambrogini and Giulia Poletti de Chaurand, both MBA20) who will continue to lead the initiative with the help of faculty and industry.
“There's clear student interest in seeing investment dollars going into social enterprises that not only offer strong risk adjusted returns, but significant opportunity to meet all the challenges that we face today,” said Bell. “Return and impact go hand in hand in a lockstep that is most readily realisable in early stages.”
The LBS fund is led by students teams who source, conduct due diligence and propose investment into seed stage companies with growth potential and measurable social impact. The investment takes the form as a minority co-investment alongside a like-minded seed investor or investors using convertible notes or preferred equity instruments.
“Business students express very strong demand for natural immersive learning,” said Bell. “And it's no surprise that employers find that candidates with practical out-of-the-classroom application of their learning are better prepared for the job market. Research indicates it, disciplines participants and improves both learning and investment outcomes.”
At impact investing competitions around the world LBS has exhibited sustained success against top MBA programmes like Harvard, Insead, Wharton. According to Bell, LBS due diligence work and pitch presentations impress American investors, serving as judges at events, but they remain fundamentally uncertain about putting venture money outside the United States. For Bell this is problematic because these are the very investment opportunities that LBS students source and pitch in these competitions.
“First, deal sourcing is a key differentiator in generating outsized returns in early stage investing, and one of LBS’s core competitive advantages is its global network,” he said.
“Second, this global network is often strongest across Africa, South Asia and South America, where social enterprises are engaged with the most pressing development challenges. US investors are passing on opportunities brought forth by LBS of students. Why should London Business School sit on the sidelines?
“LBS involvement can be the difference maker - moving the social enterprise along the funding cycle from seed stage to series A and beyond, to deliver on their impact potential.”
Leaving LBS just as the fund is poised to make its first investment, is a bittersweet moment for Bell.
“It is bittersweet, it's sad, that it's over for me,” reflected Bell. “But I feel very accomplished, and I'm ready to pass it on. I did this is to create something that would help future classes and seeing it in the hands of MBA20s knowing they will pass it on to MBA21s and so on, that's a really cool feeling.”