Impact investing has emerged as a powerful tool for investors seeking to align their financial goals with positive social and environmental outcomes. Within the space of impact investing, a unique approach has gained traction: separately managed impact investments. This strategy allows investors to customize their impact portfolios according to their specific values, priorities, and risk preferences. In this article, we explore the concept of separately managed impact investments, their key characteristics, and the potential they hold for driving personalized change.
Impact Investments are investments made in social enterprises or investment funds that seek to generate positive social and/or environmental impact alongside a financial return. As opposed to SRI and ESG investing, which rely on exclusionary practices to screen out harmful investments, impact investing aims to bridge the altruistic principles of philanthropy with traditional investing. You can learn more about the differences between these types of investing in our article SRI vs. ESG vs. Impact Investing.
Depending on the strategic goals of the investor, impact investments can be made in frontier, emerging or developed markets, and can target a range of financial returns from commercial (“market”) returns to concessional (“below-market”) returns. Impact investments can also be made through various asset classes, and can focus on varying impact themes.
Separately managed impact investments generally offer a tailored and personalized approach to impact investing. In this strategy, investors work closely with specialized investment advisors or asset managers to design portfolios that align with their individual impact goals and values. Unlike traditional investment products or funds that have predetermined impact objectives, separately managed impact investments provide investors with the flexibility to customize their portfolios based on their unique preferences.
Investors have the freedom to select specific impact themes, sectors, or geographies that resonate with them personally. They can choose to focus on areas such as renewable energy, affordable housing, sustainable agriculture, or social enterprises. Moreover, investors can determine the desired level of impact, risk tolerance, and financial return expectations, allowing for a tailored approach that aligns with their overall investment strategy.
Separately managed funds are less common than other forms of impact investing, however their flexibility has been critical in attracting large institutional and retail clients alike. Below you will find some examples of separately managed impact investments listed on Impact Capital Partners.
The flexibility of separately managed impact investments ensures that impact strategies are not a one-size-fits-all approach. Investors can focus on specific sectors or themes that resonate with their values, while also considering their risk appetite and desired financial returns. This customization empowers investors to have a direct influence on the allocation of their capital, promoting a more inclusive and sustainable world.
As the field of impact investing continues to evolve, separately managed impact investments offer a pathway for investors to align their portfolios with their personal beliefs and aspirations. By embracing this approach, investors can catalyze change in areas that matter most to them, contributing to a more equitable and prosperous future for both society and the environment.
In an era where individual values and impact objectives are gaining prominence, separately managed impact investments provide an avenue for investors to create a lasting positive impact while achieving their financial goals. By leveraging the power of personalization, we can harness the full potential of capital to address the world’s most pressing challenges and drive meaningful change for generations to come.
At Impact Capital Partners, our mission is to connect institutional capital with the growing impact investment market to address the world’s most pressing challenges. By utilizing impact investments, institutional investors are able to generate positive, measurable social and environmental impact alongside a financial return. We are constantly finding new impact investment opportunities in both emerging and developed markets, targeting market-rate returns. Schedule a call with us HERE if you’re interested in learning more about our impact investing strategies.
1 Prospective investments that are sourced through a Foreign entity or Broker-Dealer (“FBD”) are offered to U.S. Institutional Investors through an engagement with Pinnacle Capital Securities, LLC (“Pinnacle”), member FINRA / SIPC, who is authorized to chaperone the FBDs under SEC Rule 15a-6.
2 All listed investment opportunities are intended for INSTITUTIONAL INVESTORS ONLY.
3 All listed investment opportunities may or may not be profitable. They are speculative investments and, as such, involve a high degree of risk. Nothing contained above shall constitute a recommendation or endorsement to buy or sell any security or other financial instrument.
4 For Funded Opportunities, there is no guarantee that future investments will be similar.
5 Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion.
6 Impact Capital Partners is dependent upon its Fund Mangers and FBDs to select investments and conduct operations.
7 Total facility amounts represent the proposed amounts that would be available to the borrower under an agreement. This amount may change over time.
8 Interest rates include contractual rates and accrued fees where applicable and are gross of fund fees and expenses. This metric is not a measure of investment performance nor is it necessarily indicative of distributions that the Fund Manager may provide to investors.
9 All industry updates are provided to Impact Capital Partner by their Fund Managers and FBDs.