Conversation with Rahul Mukherjee '20 about Cornell Impact Investing

What is impact investing and how does the club employ it?

Impact investing is different from other regular forms of regular investing. You are investing in organizations that not only generate some sort of financial return but also some level of social return. For Cornell impact investing, our club, we are introducing our analysts to the idea of impact investing. We are partnering with some of the top impact investing firms in the country. One of them is ImpactAssets; we are working with them to help with market research due diligence and for our analysts to sort of gain some experience. Currently, we are at a stage where we are preparing our analysts to do that type of research, so we created an analyst development program to teach the basics of finance, creating validation models, and things like that so that they are prepared for the next semester. In the long run, we are preparing to manage our own investment portfolio; we are currently talking with alumni and other impact investors to lead investing projects hopefully related to CALS and their work with agricultural projects. Also in the long run, we're hoping to offer consulting service to other impact investors or impact investment firms, so that we can provide them with some of our own services such as market research.

 

What made you initially want to start this club?

Impact investing is currently one of the largest fields in finance. Personally, I've always been concerned with ways to solve problems like global warming and things like that - so working on technologies that sort of help mitigate the effects of climate change. It's a combination of my interests. I have been involved with conservation sciences and renewable energies for a while. Having been involved in that and also taking a summer internship in finance, I sort of found an overlap in my interest. I believe in the future people are going to invest in renewable energy and projects that will help benefit society, and I think we need that more than we ever needed it before. I did research on that last spring, and I also contacted some of my other friends who had also heard about impact investing. We did some research over the summer and contacted a lot of impact investing firms to learn the model of impact investing and how that process works. We then made it into a club, and hopefully we can get others interested as well. We're actually one of the only impact investing clubs in the country.

 

 What can a student learn from participating in this organization?

Getting involved in finance takes a lot. Something, I think, something that differentiates Cornell Impact Investing from other clubs at Cornell is that we made a promise that we're not just going to take people from AEM or people who have backgrounds in finance. If you take a look at our analysts, they come from all kinds of majors: engineering, bio, hotelies and ILR. Given that kind of diversity, it is very hard in the first semester to get them directly involved in impact investing. So, the first semester, the analyst development program is just geared toward them learning the fundamentals of finance, And in the semester right after this, the analysts will actually start doing hands-on projects, and they can actually expect to actually understand the ins and outs of impact investing. Some of this relates to their own experience. For example, the engineers that we have in our club have already begun to understand opportunities where they could invest because given some of the engineering projects they have worked on and the real-life opportunities they already know of given their background. So, the first semester is just really the development program, helping them get involved in impact investing, and from then on they’re working on hands-on projects in which they start learning everything they need to know from finding the right opportunities to actually allocating our resources and our investment funds in those projects.

 

What do you think is the future of impact investing?

If you think about our country as a whole, there are different housing projects and developments that haven't taken place yet. Our government hasn’t been able to fund some of those projects when it comes to education and things like that. I think there have been significant issues surrounding that, and given our political climate as well, I think that has contributed to our problems. We are constantly fighting on where we should allocate our resources - whether that be the military or education - so I think impact investing definitely helps with that because now you have people who are actually mindful on some of these issues, working to get involved in that. People have found opportunities where they can not only get some sort of social returns that help society as whole, but they can generate some sort of the financial return from it as well. I think this type of model hasn't been explored before. Given our constraints with how we are able to use our resources and our federal budget, people are more mindful and want to get involved in this field. So that's where I believe the future of impact investing is going to be. We are going to see the growth of different technologies that haven't been able to emerge because there hasn't been suitable investment opportunities. So I'm excited for sure.

 

What are some of the challenges you faced so far?

One of the prime challenges for us was actually getting ahold of some of these impact investment firms. This club, Cornell Impact Investing, was something that was thought of 6 years ago. There was an effort to create an impact investing club 6 years ago, and I am still in touch with the person who initially led that initiative, but the reason that they were never fully established was because they weren't able to talk to any of these impact investment firms.  They wanted to make their own impact investment, and the impact investment firms didn’t think an undergraduate investment club was going to offer anything useful. With our club, we talked to some of the impact investment firms and said that “we are more than capable to create a successful program, just allow us the opportunity to first train our analysts and gain some sort of credibility.”  It was a challenge for us to just talk to them and say what we wanted to do and getting them to listen to us. Some of the other challenges that we are currently facing is receiving funding. Like I said, we are in talks right now, and hopefully we are going to get a lot of funding for next semester to start managing our own investment portfolio. That is honestly, for now, one of the only challenges that we are facing, but things are going well for us.