NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, April 16, 2014

One of the interesting and important recent developments in wealth management has been the emergence of a group of clients committed to investing with impact across their entire portfolios, meaning they seek to deliver measurable positive social or environmental benefits with every dollar they put to work.

This includes high net worth individuals, often from the millennial generation, such as Leisel Pritzker Simmons and Ian Simmons, family foundations like the KL Felicitas Foundation, and philanthropic institutions like the F.B. Heron Foundation.

For any large investor, this “100 percent for impact” approach requires a significant commitment of time and effort to identify and vet a range of strategies, from public market investments that screen companies for high performance on social and environmental criteria or emphasize active shareholder engagement, to smaller private equity or debt funds providing capital to companies whose core mission is to create positive social outcomes through their products, services or operational approaches (in addition to linking philanthropic capital to their investments). Investors leading this charge are proud to construct portfolios in which they can identify choices for every asset class and are also starting to reap market-rate and sometimes market-beating returns. These are the pioneers of impact investing and we laud them.