Titans of Finance – Sir Ronald Cohen on Impact Investing

The Bob Johnston Podcast

Each of us has an ‘origin story’ about our childhood, family and their effect on our adult lives and career. In the case of today’s guest, who is considered to be the “father of impact investing,” I walked away from our conversation with tremendous admiration and respect for how his early years have influenced his life’s work.

At age 11, Sir Ronald Cohen’s family fled Egypt during the Suez crisis of 1956. His father lost a thriving business and they were forced to start over in the UK, as refugees. Flash forward just six years later and Sir Ronald earned acceptance to Oxford University – where he was President of the Oxford Union no less, followed by a full scholarship to Harvard Business School. Flash forward another handful of years and Sir Ronald joined Alan Patricof, who now runs Greycroft (listen to my podcast with Alan here) at Apax Partners to form one of the world’s first venture capital firms.

Sir Ronald got into venture capital to back tenacious individuals who came from nothing – just like he did – with a goal of using venture as a tool for good to create jobs in the UK, at a time when three million people there were unemployed. It made an enormous impact and he was knighted for his efforts.

Fun fact: the first fund at Apax was just $15m (sizable for the time)…and Apax’s latest fund raised a whopping $11Bn!

In the podcast, we discuss Sir Ronald’s latest book, Impact: Reshaping Capital to Drive Real Change, the program he chairs at Harvard which measures the environmental impact of over 1,800 companies, how impact is directly correlated to a company’s stock price, how a cost can be ascribed to a corporation’s pay gaps and a corporation’s lack of diversity…his thoughts for the new Biden administration as it relates to impact…and much more!

My favorite quotes:

• “Do you really want your headstone to read: ‘He delivered 30% IRR (Internal Rate of Return)?’” – On why venture capital should be more than just making money
• “We bring in the ‘Invisible heart’ of markets to lead.” – On how to tame the wild beast and ‘invisible hand’ of the markets