The unlimited potential of incremental change in impact finance
An interview with Bart Schaap, the managing Partner and co-founder of Total Impact Capital Europe, an impact-first fund manager & advisory firm.
Bart Schaap has over 20 years of experience working in development finance, and has experienced first-hand the difficulty of the market. Although there rarely lacks innovative projects and ventures, and ambitious founders and impact investors, few businesses reach scale and investments are never easy to generate real social and financial outcomes.
While making the world a better place is a noble idea, Bart is a pragmatist, acknowledging that impact finance alone cannot overhaul the whole system. Total Impact capital europe, founded by Bart and Femke Smeets brings together a group of professionals who possess passion and courage, but also patience and stamina to focus on the incremental shift.
Using Finance for Impact
After graduating as a monetary theorist from the University of Groningen, Bart started his career as an analyst at Standard and Poor’s in the bustling financial hub of London. While it was a natural path for finance professionals seeking growth and challenge, Bart realized a stark dichotomy that “the industry was more interested in profit than catalyzing transformation”.
In the early 2000s, amid Europe’s economic abundance, Bart took an atypical turn, looking at markets where liquidity was scant, and investments were few. This exploration was rooted in his belief in finance’s potential to ignite positive market shifts. This drive led him to the Republic of Georgia – “I was attracted to the complexity and dynamics of the place, straddling Europe and Asia, recovering from war and conflict, and there was an ambitious anti-corruption national strategy”.
Here, Bart led the setup of the country office of Argo Saint George (ASG), a specialist corporate finance, private equity placement, asset management, and investment management firm. With Tbilisi as its backdrop, ASG extended fundraising support to a myriad of companies and funds, with Bart steering a team to unravel impact investing’s potential within Georgia’s real estate sector. Bart became further involved in the country and especially the younger generation when lecturing at the Caucasus Business School at Tbilisi University.
Forging a Global Mindset
Bart’s experience in Georgia solidified his belief in impact investing in emerging markets, which drew him back to the Netherlands.
During his nine-year tenure at the Medical Credit Fund (MCF), a healthcare investment fund for Sub-Saharan Africa (SSA), he amalgamated his financial expertise, risk management acumen, and a passion for innovative business models in developing nations.
In Sub-Saharan Africa, where almost half of healthcare services are provided by the private sector, Bart recognized an urgent need: the demand for quality healthcare surged with the growing population, yet access to loans and investment was impeded by inadequate financial resources. As CFO, Bart helped MCF raise USD 50mln of capital with European and US based investors to support private healthcare SMEs through loans and design and implement innovative fintech solutions.
“Doing business in other cultures is difficult but refreshing – it reminds you of your ignorance of the world’s diversity and its unlimited possibilities”, says Bart.
When designing new financial products for MCF, understanding the behaviour of borrowers is key and not to make implicit assumptions on the basis of your own world of reference. Bart came to notice that acknowledging cultural differences is crucial in the design. In many developing countries, bank accounts are mainly kept, not to start saving for future use, but as a way to build creditworthiness and access bank loans.
These experiences shattered his preconceptions and nurtured his affinity for rigorous questioning when entering unfamiliar fields and markets.
“You have to be humble and admit you can’t know everything, so at TIC we work very closely with local teams who bring a strong on-the-ground network and understanding of the landscape that is not learned on paper”, Bart states.
“And this is one of the things that motivates me on a day-to-day basis”, Bart adds, “to build and work with a team of professionals from all over the world who have diverse backgrounds, speak different languages and possess acute perspectives and an open mind.”
The Human Element of Impact
When looking back, Bart is always “amazed at how the young ambitious Georgian students in his lectures have now grown into financial professionals, contributing to the country’s development, and scaling their businesses”.
“Those young people constantly remind me of individuals’ profound potential.”
That is why Bart believes that “impactful change starts from individuals”, from entrepreneurs kindling business growth to investors injecting faith into transformative models.
At its core, the philosophy of Bart and TIC emphasizes the human element. Creating learning opportunities for youth catalyzes an entrepreneurial climate that generates innovation and jobs; supporting clinics’ financing to broaden medical access for patients, and improve employees, and their families’ lives; supporting NGOs as well as multinational corporates in setting up long-term, sustainable financial models to move away from typical donor-driven models and shift the focus away from donors and towards beneficiaries.
Through Total Impact Capital, Bart and his team serve a portfolio of clients who share pragmatism and a drive for change.
“We are blessed to be trusted and given opportunities to build and refine blended finance solutions for clients,” says Bart, “and throughout the journey we are able to prove that it is possible to make impact and change while making it business success.”
Such a journey necessitates bringing on partnerships of diverse backgrounds. While working at MCF, Bart met John Simon, co-founder and managing partner of TIC US, and Femke Smeets, who later co-founded TIC EU together with Bart – a strong team that brings a harmonious confluence of expertise in investing, blended finance, and political engagement.
Bart believes, “impact-first investing is not a zero-sum game, and is only possible with a network of diverse DNAs – investors, donors, governments, corporates, etc., – to join the mission.”
It is undoubtedly challenging, given actors in different sectors have diverse priorities and worldviews, but TIC’s advantage lies in its ‘bilingual ability’, conversing fluently with the private and public sectors.
“Changes are not always made in a revolutionary way,” Bart believes that, “in many cases, it is the patience, stamina, and courage that pave the way.”