NB Financial Innovation
Connecting Assets to Impact: ImpactAssets 50 showcases private fund managers that deliver social and environmental impact as well as financial returns
An entrepreneur grows a successful company and sells it, resulting in sudden wealth. On a reflective trip around the world he is impressed by the enterprising spirit of small businesses in Africa. The social and economic impact of these businesses is clear and he vows to find a way to support them, just as early investors once provided catalytic capital for his venture. Upon returning home, his philanthropic and financial advisors are skeptical of an impact investment strategy and his own research leads to slim and scattered information.
This is the true story of Ron Cordes, the entrepreneur behind AssetMark and the subsequent founder of ImpactAssets, a nonprofit financial services firm dedicated to building the field of impact investing. It is a story that continues to repeat itself for individuals seeking meaning and impact in their investments. However, an online search for “impact investing” yields far more resources today than it did for Ron in 2006, when he started down this path.
The ImpactAssets 50 is an annual showcase of impact investing fund managers that grew out of a commitment made by the Cordes Foundation, in collaboration with ImpactAssets, at the Clinton Global Initiative in 2010. Its goal is to provide needed information to investors and their financial advisors, and to connect more assets to impact. Now in its fourth year, the ImpactAssets 50 features 50 private debt and equity fund managers that deliver social and environmental impact as well as financial returns. The fund managers on this year’s showcase manage more than $15.5 billion in assets for positive social and environmental impact.
For those starting or deepening their exploration of the impact investing landscape, the IA 50 database provides easy filtering by asset class, geographic region and issue area, and gives a detailed overview of each firm’s investment thesis, sample investments, leadership team and target impact outcomes.
For example, if you search for fund managers with experience in water and sanitation projects in Eastern Europe and Russia, you’ll find details on Oikocredit and the UNICEF Bridge Fund. If you are interested in sustainable agriculture in Central and South America, you’ll see 16 profiles that meet those parameters; narrow your search to those with $50 million to $100 million in assets, and the database will identify Alterfin and Global Partnerships.
Advisors have been able to use the ImpactAssets 50 as a jumping-off point for their own research, as well as a resource to share with clients. As a baseline, those included in the database have at least $10 million in assets under management, more than three years of experience as a firm with impact investing, and documented social and/or environmental impact. Many use standardized impact measures that ensure a more comprehensive understanding of benefits and risks.
“The IA 50 is a solid starting point for investors and advisors looking for fund managers with established track records across a range of impact investment criteria,” says Matthew Weatherley-White, managing director of the CAPROCK Group and member of the ImpactAssets 50 selection committee. “Investors who have been watching from the sidelines and waiting for the field to mature will find no shortage of opportunities.”
As the next generation of investors comes into their assets, millennials have shown heightened interest in sustainable investing, and are reaching out to advisors for support in selecting from a growing universe of impact investment options. Along with the IA 50, ImpactAssets has released more than a dozen impact investing issue briefs, to help both novice and experienced investors better understand the field and vet the opportunities that may best serve their goals.
The field has grown tremendously since the first ImpactAssets 50 was published in 2011, but the IA 50 is still the only free, public, searchable database of outstanding private debt and equity fund managers in the impact space. This year’s showcase, which includes funds based in the United States, Africa, Europe and Latin America, highlights the increasingly diverse opportunities for investors to help create social value across the globe. The featured funds focus on issue areas including: health and wellness, microfinance, small business development, sustainable agriculture, and water and sanitation.
The quality and variety of these opportunities shows how far the impact sector has come since Ron first struggled to find investments that aligned with his values. As it becomes increasingly clear that a growing number of investors share the desire to put their capital to work for social, environmental and economic good, resources like the IA 50 can play an important role.
Lindsay Smalling is a strategic initiatives officer at ImpactAssets.