High Profile. The social banker

Vikram Gandhi, an investment banker whose career spans two decades with Credit Suisse and Morgan Stanley, doesn’t fit in with the stereotypical notion of the Wall Street dealmaker, always on the lookout for the next big deal (and bonus!). Gandhi now splits his time equally between high finance and making a social impact.

But isn’t the idea of running a social venture at variance with the notion of making a profit? “Social ventures are sustainable businesses that serve the under-served,” he says, explaining that profits ensure that a social venture is able to sustain itself. Nor is it difficult to run a profitable social venture, he says, citing examples.

Smokeless bio-mass stoves used for cooking prevent a lot of health issues arising out of inhaling smoke. This is quite a scalable idea as the product can be used in India as well as many African countries. It has been successful in many countries around the world. Success for such ventures however depends on their being able to benefit from experienced management.

It was this realisation that, in fact, prompted him to focus on social impact funds. “I started off by being a part of Grameen Foundation. Having worked in financial services and looking at how businesses can be run, I felt social impact funds are where I can add value,” he says. Vikram’s CV checks all the boxes for a top notch banker. A graduate from the University of Mumbai, a qualified Chartered Accountant, Vikram also holds an MBA from the Harvard Business School.

But his current passion is Asha Impact, the social venture that he has founded. Asha, which means hope in Hindi and life in Swahili, is a social fund that invests in three key areas — financial inclusion, affordable housing and alternative energy. The fund is in its early days and is likely to announce its first investments in the “next few months”.

Vikram is putting his negotiating and deal-making skills to good use in trying to engage policymakers, industry and investors.

“There are many levels of policy — Centre, State and local. Getting everyone aligned is always a challenge,” he says. He cites affordable housing as an example of where policy can play a critical role. How land is made available by the Government, what are the terms of a public-private partnership engagement and the ways to fund the project — these need to be thought through to make them click. “India is a hot test bed to try out ideas. The key, as with the lessons learnt from the micro-finance issue, is to maintain a balance between social impact and profitability,” he says.

So, what does Gandhi fancy in his other avatar, as CEO of VSG Capital Advisors? He advises entities such as the Canada Pension Plan Investment Board and other sovereign wealth funds. “We are looking at sectors such as real estate and infrastructure as areas where long-term capital can be deployed,” he says.

We ask him why foreign private equity investors aren’t making a beeline for India. Low returns are one reason, he says. “Funds expect to earn a premium of 4-5 per cent over the stock market for taking on liquidity and other risks, with private equity. But the Indian stock market returns have been good compared to private equity.”

He also feels that in the past, lax regulation of IPOs meant that companies could raise capital from the market rather than seek private funds.

But going forward, “strict IPO markets may trigger interest from foreign investors”.

He has worked with the National Innovation Council over the last few years to set up The India Inclusive Innovation Fund and is also a Member of the Standing Council of Experts under the Ministry of Finance, Government of India. But how does he handle all these roles — philanthropy, investment banking and the impact fund?

“I travel a lot for my investment banking, social venture and my other involvements,” he says.

“I like to attend conferences, meetings and other opportunities to meet, network and interact,” he confesses. So, how does he find his balance? “My philanthropic work relaxes me, I don’t think of it as work,” he says. “I play golf and take vacations with my kids during summer.”

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