The Editors' Post: Leaps of faith – and end of a fairtrade era

Investors understandably look for ‘track record’ – previous successes, strong portfolio performance – in choosing a fund manager. But where does that leave those with less experience?

Investing in someone managing their first or second fund means taking a leap of faith. But some believe it’s a leap worth taking, as Alina Klarner argues this week: the data show that emerging funds perform better than others. Plus, not only are you likely tapping into a new market, you’re also highly likely to be backing someone of a diverse or underrepresented background – a whopping 90% of all female fund managers are considered ‘emerging’.

Klarner shares multiple reasons to back emerging and diverse (the two often overlap) fund managers. Among others, for these professionals, “running a lean ship and working to beat the odds will be nothing new”. Nor is there a shortage of exceptional diverse business founders, says Klarner, whose own organisation, the diversity-focused Impact Shakers, reviewed 2,000+ startup pitches last year. 

That echoes the experience of the UK’s Growth Impact Fund, which looks to be proving the naysayers wrong: this week, we learned that at least 90% of social enterprises applying to the equality and justice-focused fund had founders or leaders from underrepresented backgrounds. It completed a £8.2m first close last week – and with 400 applications received already, it sends a strong signal that the demand is out there.

Kicking the tyres

Also this week, our columnist Jeremy Nicholls has the first in a four-part series on assurance and audit. Stay with me: it might not get your heart racing – but as he shows, a sustainability report without independent assurance is really only good for marketing or “propping the door open”. A better understanding of these vital nuts and bolts of business – and yes, maybe even falling in love with assurance and audit – means we can create a system that enables better decisions, and ultimately more positive impact. 

Nicholls is also on form in another piece, co-authored with Adam Richards and Bonnie Chiu. It may be tempting to shrug off your organisation’s negative impact, or assume it’s too difficult to pinpoint, but pretending it doesn’t exist is as bad, our contributors write, as a used-car salesman who “kicks the tyres and tells us that there has only been one careful owner – while hiding the array of problems that lay beneath the hood”. 

Trailblazer Traidcraft to close

Finally: fair trade produce is usually easy enough to find these days – but it wasn’t always that way, and it’s thanks to some early pioneers that ethical shopping is a bit easier. Now, one of the social enterprises that spearheaded fair trade in the UK, and helped to develop the globally recognised Fairtrade Mark, is about to enter administration. My colleague Julie Pybus has more on what this means for staff, suppliers and the wider industry.

This week's top stories:

‘Odds stacked against it’: Traidcraft, the UK’s pioneering fairtrade enterprise to close

Opinion: Emerging and diverse fund managers outperform – here are five reasons why

The secret to sustainability: why assurance means better decisions

Top image by Julia Volk on Pexels

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