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Our Approach

Our track record shows that strong commercial results and impact can go hand-in-hand.

How we think about impact

We believe that our focus on sustainability and societal impact is core to our success.  Not only does it motivate us as a team; it also helps us to identify opportunities that have significant growth potential precisely because they’re helping to solve society’s most pressing long-term challenges.

We are a very hands-on investor, working in partnership with management teams to support their growth strategies. Our team includes a number of experienced entrepreneurs, and we use these operational skills – along with our proven investment expertise – to help our portfolio companies maximise their positive impact in ways that also enhance their value.

Since 2002, we have pioneered a range of investment models to drive impact across asset classes – be it backing businesses that generate jobs in areas of high unemployment, building environmentally-friendly elderly care homes to sustain our ageing population, or providing flexible financing for innovative youth employment programmes.

Find out more about our different types of funds.

 

Our methodology

We call our investment approach ‘impact-driven’, because we use impact as a lens to select and engage with every one of our investments.

Over the last decade, we have developed a methodology and a set of analytical tools that help us make informed investment decisions based on both commercial and impact analysis. Our starting point is a specialist focus on four impact ‘themes’. We then apply a consistent process (Bridges ‘SET’), based on clear criteria (‘Bridges Impact Radar’).

* For more information on Bridges’ impact analysis, download the  Bridges IMPACT Report – A spotlight on our Methodology

Our four impact ‘themes’

Our strategy is to focus on opportunities where we can generate strong investment returns while helping to meet pressing social or environmental challenges. Our investments range from high-growth SMEs, to property, to social enterprises – but all of our funds share a focus on four impact themes: Underserved Markets, Health & Well-being, Education & Skills and Sustainable Living.

 

themeschart

Our Impact process

Our team looks at investment in a fully integrated way, analysing the interplay of social and commercial factors. This enables us to spot opportunities where a societal challenge creates an investable opportunity, and to match the impact and financial return profile of that opportunity to the appropriate Bridges fund.

Across our funds, we look to integrate impact analysis throughout the investment cycle. The video animation above explains our three stage ‘SET’ process (Select, Engage, Track); while below we outline how our Impact radar guides us through the investment process.

 

Bridges Impact Radar

Over the last decade, we have learned to focus on four key criteria when assessing impact. Although we tailor our approach for each of our different funds, these criteria help us develop a holistic view of an investment’s ability to generate positive societal change.

To us, understanding the potential impact risk of an investment is just as important as understanding the potential impact return. So we look at both for each of these four areas; and this helps inform our overall risk/return profile for each investment.

Our scoring system is intended as an indicative guide, not a categorical assessment. Pre-investment, we have found that it provides a useful basis to discuss our potential investment thesis. Post-investment, it acts as a portfolio management tool, allowing us to monitor the impact risk/return profile of each investment (and therefore fund) on an on going basis.

 

Basic RGB

 

 

Bridges Impact Scorecard

In order to track an investment’s performance against the Impact Radar, we work with each portfolio company to determine the most appropriate key performance indicators (KPIs). We then record these on our Impact Scorecard.

We review the KPIs each year to ensure that the data we track are properly demonstrating our investments’ positive contribution to society and their protection and enhancement of value for investors.

* For more information on the rest of our Impact Toolkit, please see Bridges IMPACT report 2013: A Spotlight on our Methodology.

Bridges Impact+

Bridges is committed not only to promoting financial and societal returns through its own funds but also to supporting the growth of the wider sustainable and impact investment sector. It is in this spirit that we have established Bridges Impact+, our advisory function.

 

 


 

Bridges’ Impact Toolkit is licensed under the Creative Commons Attribution-NoDerivatives 4.0 International License that allows the copying and distribution of this material as long as no changes are made and credit is given to the authors. For more information please visit https://creativecommons.org/licenses/by-nd/4.0/