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Nuveen’s former impact director seeks more risk-return ‘nuance’

Hannah Schiff has joined a firm raising a Displaced Communities Fund, which will invest in financial institutions servicing low-income climate migrant communities in emerging markets.

Hannah Schiff, Developing World Markets

“There are roles for different types of capital in this space, and it all counts as impact investing,” Hannah Schiff, former director of impact and responsible investing at Nuveen, tells New Private Markets.

Schiff recently joined Developing World Markets, an impact investment firm for developing and frontier markets, as director of impact. She was previously director of impact and responsible investing at Nuveen from August 2018 to November 2020 and formerly a researcher at the Global Impact Investing Network.

Schiff’s new role will allow her to focus more on “how our investments translate for folks on the ground into beneficial services, and goods, and changes in their wellbeing”, she says.

“We can put our energy and resources into the quality and rigour of creating impact and we can give back to the industry in terms of some best practices and learnings.”

“There are a lot of differences” between Schiff’s roles at Nuveen and DWM, she says. At Nuveen – which was the anchor investor for DWM’s 2009-vintage first private equity fund – Schiff oversaw multiple impact portfolios in different asset classes and both public and private markets.

She also oversaw ESG and sustainability issues outside the asset manager’s impact portfolios. “One of my observations was that there are a lot of different voices and approaches [to impact investing].”

Her role focused on “getting some consistency and coherence around these different views and definitions and how we should use different terms.” Nuveen saw its role as a cornerstone investor for commercial impact funds, drawing in other institutional investors, Schiff adds.

Rewriting risk perceptions

DWM is raising a $50 million Displaced Communities Fund to invest in financial institutions serving low-income climate migrant communities in emerging markets. It has received an $18 million anchor commitment from a German faith-based institutional investor and a first-loss guarantee from a European development finance institution. DWM is linking 75 percent of its carry to impact targets and has a returns target below its typical 10 percent to 15 percent for equity investments.

The firm is on a mission to rewrite risk perceptions of financing these communities, says Aleem Remtula, private equity partner at DWM.

“The perception of risk here is actually greater than what the actual risk of servicing this population would be,” says Remtula. “The average duration of displacement now is 25 years in Pakistan. People who remain in this category of internationally displaced person or refugee have actually been in their host countries now for over 25 years,” he continues.

Such individuals often have stable incomes and he says: “Forty-five percent of that population has savings, but only 7 percent of them actually save at a financial institution. That is a business opportunity for most of these financial institutions to access deposits, remittances and cash transfers.”

DWM is seeking to refine risk and impact indicators to better capture such investments. “We’re trying to look at the risk-return relationship in a slightly more nuanced way,” says Schiff. “How can we shift capital to create the most efficient, deep positive impact while having good returns?”