From an early age Dan Madhavan has been someone used to seeing life through a different lens and a shared sense of responsibility to his community.
As part of a mixed Indian, Chinese and Dutch immigrant family growing up in the outer Melbourne suburb of Pakenham, he was the only non-Anglo Saxon in his whole primary school.
Then, courtesy of watching “a few too many bad stockbroking movies”, he was also the only one of his friends to leave town and go to university, eventually rising from a job in the call centre at JBWere to acting CEO of the investment firm by the time he was just 33.
With this sort of CV Madhavan admits it would have been easy to stay in the world of corporate finance, with the security of a lucrative, well-structured career in private equity the next logical step.
But after providing strategic advice for the not-for-profit sector during a career-break in 2014, this particular corporate dynamo became captivated by a unique financial model with what he saw as an electrifying capacity for social change.
“Impact investing is an investment where you are looking for a financial return but also a measurable social or environmental return as well,” Madhavan, now CEO of Impact Investing Australia (IIA) says today.
“Our role is to support both the investor side and also the organisations and businesses driving social change and how to finance their activities.”
Madhavan first learned of his current job through his not-for-profit contacts and applied for it knowing the role was the right combination of financial problem solving and drive for social good that he had grown up with back in Pakenham.
He credits his parents Ann and Robert with giving him his strong sense of community responsibility through the example of their own volunteer work.
He also saw first-hand the social hardships endured by some of his friends through their teen years – including drug and alcohol addiction, depression and even stints in prison – and knew he had to do something to help after his career success.
But despite already sitting on a number of not-for-profit boards during his corporate life, it was while working with youth advocacy group Foundation for Young Australians (FYA) in 2014 that he met a new breed of young entrepreneurs who were combining a social and business vision.
“They were trying to build businesses and drive social change both at the same time – as complementary,” Madhavan says. “When I was able to wrap my mind around this, it was compelling. I’m really passionate about issues affecting young people. This is where the fire caught on with me.”
Since starting at IIA in October 2014, Madhavan has worked to implement a plan to drive impact investing as a force for change in Australia, first by locating the early adopters to lead and then giving them enough support to develop deals for a healthy market system.
One of the many stakeholders he helps to bring together is the National Australia Bank (NAB), whose head of community finance and development Corinne Proske sits alongside him on an assessment panel for a fund aimed at getting promising social enterprises ready to raise capital.
The Impact Investment Readiness Fund was launched in March 2015, seeded with $1 million from the NAB, and offering grants of up to $100,000 to help support businesses scale up.
Businesses receiving the grants typically have an embedded social or environmental mission, and are working to deliver positive change on issues as diverse as poverty, the ageing population and struggling indigenous communities. Recipients can use the grants to purchase specialised support from providers – such as advisory, financial, intermediary or legal services – to prepare them for securing private investment and scaling up their impact.
Proske says she appreciates her colleague’s clear thinking, which helps distill complex problems into elegant practical solutions.
“He has a good eye for things that are commercially successful but he also has an appetite for innovation and looking for different models,” she says.
“Our collective aim is to create a marketplace where it’s OK to make money and do good all in one hit. You need various players for that system and IIA’s voice in that is essential.”
Madhavan says part of his success has come from walking towards a problem and not away from it, and always taking the interesting opportunities that have come along.
“If something captures your attention, go for it because you’ll be interested in it and passionate,” he says.
Right now for him that passion is impact investing and using it as a tool to help finance the social challenges he sees Australia is facing, like the impact of changing demographics and the technological disruption of the economy.
A recent IIA survey found more than two-thirds of all investors expect impact investing to become a more significant part of the investment landscape in coming years, with active investors saying ideally they would triple the size of their impact portfolios over the next five years.
The local market is estimated to reach $32 billion over the next decade, but Madhavan says there still needs to be more support to help it reach its potential.
“I know the momentum and the interest is there,” he says. “But you have to be able to hold your direction in a very difficult space. I love a challenge though and I get to work with some very interesting people: entrepreneurs who are so committed and passionate about what they are doing that it’s inspiring.”
