“Building a more sustainable and a more inclusive economy is not just a moral or an ecological imperative. It’s also a unique opportunity to create lasting economic and social value. ”
— Michele Giddens
Welcome to SRI 360. I’m Scott Arnell. Today we’re doing something a little different. Instead of a single guest, I’ve pulled together three of the most compelling conversations we’ve had on a topic that I think is one of the most important and least understood ideas in impact investing: catalytic capital.
Across these conversations, we explore how capital can be structured not just to generate returns, but to unlock entirely new markets. From the mechanics of blended finance to the role of government in shaping investment ecosystems, to the real-world execution of scaling impact strategies, what emerges is a clear through-line: how you invest can matter just as much as what you invest in.
In this episode, I’ve brought together some of the most compelling moments from those discussions. Think of it as a way to step back and see the bigger picture, how catalytic capital works in theory, how it’s enabled in practice, and what happens when it’s deployed effectively at scale.
Here are the guests featured in the episode:
Yasemin Saltuk Lamy, Head of Investment Strategy at Legal & General
Yasemin has been at the forefront of defining and shaping impact investing as a discipline. In our conversation, she breaks down the mechanics of catalytic capital and how it steps into areas where traditional investors won’t go, and how structuring capital in a junior position can help de-risk opportunities for institutional investors.
We also explore her work building the Catalyst portfolio at British International Investment, where she applied a multi-dimensional framework across impact, return, risk, and liquidity. One of the most interesting insights: while many assume a trade-off between impact and financial return, her experience suggests the more meaningful tension is often between impact and liquidity.
Listen to the full episode here
YouTube episode here
Stephen Muers, CEO of Better Society Capital
Stephen brings the policy and institutional lens to the conversation. Better Society Capital was founded with a highly unusual capital base, including hundreds of millions from dormant bank accounts, designed specifically to grow the UK’s social impact investment market.
In our discussion, Stephen explains how that structure enables long-term, patient investing and how BSC operates not just as an investor, but as a market builder. We also explore the tools that help catalyze private capital, including government guarantees, first-mover investments, and blended finance structures, and how these mechanisms have contributed to a 12x growth in the UK impact investment market over the past decade.
Listen to the full episode here
YouTube episode here
Michele Giddens, Co-Founder of Bridges Fund Management
Michele’s story is where theory meets execution. Starting with a £40 million fund, including £10 million of government catalytic capital, Bridges set out to prove that you could deliver strong financial returns while intentionally driving social and environmental impact.
In our conversation, Michele reflects on the early skepticism they faced, the importance of structuring capital to change risk-return dynamics, and how that initial catalytic investment helped unlock over £2 billion in private capital over time.
We also dive into real examples, from addressing fuel poverty to scaling affordable housing, that demonstrate how impact and strong financial performance can reinforce each other when approached thoughtfully.
Listen to the full episode here
YouTube episode here
Taken together, these three perspectives offer a window into how catalytic capital actually works, not just as a concept, but as a practical tool for building markets, mobilizing private investment, and tackling large-scale social and environmental challenges.
If something resonates, I’d encourage you to explore the full conversations. There’s a lot more beneath the surface.
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Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Castbox, YouTube Music, Amazon Music, or on your favorite podcast platform. You can watch the interview on YouTube here.
What was your favorite quote or lesson from this episode? Please let me know in the comments.
SHOW NOTES:
[11:19] Catalytic Capital, Explained Simply
[14:27] The Hidden Trade-Off: Impact vs Liquidity
[19:51] The £600M Origin Story
[25:52] Growing a Market, Not Just a Portfolio
[48:47] £10M That Changed Everything
[50:46] When Impact Outperforms Expectations
MORE QUOTES FROM THE INTERVIEWS:
“So, catalytic capital to me is capital that will step into a space others want. BII used catalyst funding to back a platform called MedAccess, where it was the sole funder of MedAccess; in fact, it founded MedAccess and developed the platform to provide volume guarantees in pharmaceutical development to help encourage manufacturing companies to develop lower cost product. ”
— Yasemin Saltuk Lamy
“Misconception. One of them is, and this is a constant misperception, is that there is some kind of relatively linear trade-off between financial impact and social impact. But if we look at our portfolio, it isn’t true at a portfolio or even at investments within funds. It’s more like a scatter chart. So you actually can’t really find a correlation at all. ”
— Stephen Muers
“I was trying to find this career with a sense of purpose, but also measurability and accountability. The reaction that we got when we went out to raise the first fund really embodied that polarized vision. If we wanted to have an impact on lower-income parts of the country, we should be setting up a foundation and giving away money. And if we wanted to be serious about making returns, then we needed to forget the social mission. ”
— Michele Giddens
