responsAbility

Driving development through successful investments

responsAbility Investments is a pioneering impact investor that shows how investment success and development impact can be perfectly combined. With assets under management totalling more than USD 3 billion and investments in 90 countries, it is a leading provider of development investments.

The country is India. Murta from the rural village of Harhua attends the credit group meeting at her local Utkarsh branch to pay her latest instalment. She took out a microloan so her son could start a mobile phone business. “I can pay back the loan, my son can feed his family, and he’s got a little extra money to set aside,” she explains. Utkarsh Small Finance Bank is now serving some 1.3 million borrowers, 98% of them women, thus ensuring that people have access to financial services. The bank is managed very professionally, and it is growing and making a profit – much to the delight of its investors.

Impact and growth
Utkarsh is one of around 540 companies in 90 countries that make up responsAbility’s portfolio. All operate in countries outside the Organisation for Economic Co-operation and Development in the financial, energy or agricultural sector and address the needs of a broad cross-section of the population. Profiting from the growth of developing economies, they are expanding and require capital in the form of both private debt and private equity. responsAbility makes this capital available via a range of investment products.

“Switzerland leads the way in impact investments in developing countries.”
Philipp Cottier, responsAbility Investments

Scalable success
Two of these investment products – one for micro and SME finance, another for sustainable agriculture – are also authorized for private investors in Switzerland. However, around 40% of their volume is attributable to institutional clients, who appreciate their low correlation to other investment products. Besides a long track record, what these investors demand first and foremost is size. responsAbility has achieved this by successfully scaling what started out as niche products. Our biggest fund for micro and SME finance, which was launched in 2003, is now worth over USD 1 billion, and we also have a climate fund with assets under management in excess of USD 600 million.

Access to new investment markets
When developing new investment themes, responsAbility benefits from highly constructive working relationships with public-sector investors including development banks and Switzerland’s State Secretariat for Economic Affairs (SECO). They enable investments by the private sector through seed funding and loss hedging, opening up access to new investment themes such as climate protection and renewable energy in Africa.

Interest from international investors
The Swiss financial sector is a world leader in the field of sustainable investments, but demand for innovative impact investments is also growing globally. In Scandinavia, for example, pension funds are required to invest ethically. responsAbility Investments, meanwhile, believes that impact and environmental, social and governance (ESG) criteria are given far too little attention in Switzerland.
“Switzerland needs rules forcing pension funds to invest ethically.”
Philipp Cottier, responsAbility Investments

Innovation as a selling point
responsAbility Investments would like above all to see Swiss asset managers gaining easier access to EU markets with their investment products. The company is confident that innovation will continue to be a key success factor going forward. In impact investments and offerings for qualified investors especially, the regulator needs to leave room for providers to innovate. This includes ensuring that banks and insurers do not have to underpin their private equity and private debt investments with too much capital.