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

Thursday, March 15, 2018

ImpactAssets today slashed investment minimums on its private debt and equity investment options to $10,000 and flattened administrative fees to 0.40%. Effective March 1, 2018, the changes are designed to break down the barriers to deep impact investing for donors within the ImpactAssets Giving Fund, its donor advised fund.

“Unquestionably, interest in impact investing has mushroomed, but investors remain daunted by significant financial hurdles, including investment minimums that can be as high as $250,000 to $1 million,” said Sally Boulter, Senior Engagement Officer at ImpactAssets. “We believe flat fees and lower minimums will lead to greater engagement with financial advisors and individuals who want to ‘toe-dip’ into impact investing.”

“There’s a real hunger among many investors—partly driven by the current political environment—to tap investment strategies that address critical systemic problems,” Boulter added.  “Our clients look for deep, meaningful impact combined with appropriate financial returns.”

In addition to dropping fees and minimums, ImpactAssets added two new private debt funds to it growing roster of investment solutions that open access to impact investments in ecoforestry, climate change solutions, sustainable food and agriculture, underserved small business owners, the growing middle class in emerging markets and more.

The new funds include:

• Ecotrust Forests III (EFIII), a long-term investment vehicle targeting commercial forestland in the western U.S. that have unique social and environmental attributes. The goal of the fund is to diversify investment in properties across regions, hold periods, timber and income streams. EFIII identifies and monetizes conservation, cultural and environmental assets to generate value for investors and society. The main driver of value is timber as well as various conservation finance tools including easements and carbon finance. Through its first and second funds, Ecotrust Forest Management (EFM) has honed its investment strategy to focus on property acquisitions where a competitive advantage exists.
• Community Investment Management (CIM), an institutional impact investment firm providing strategic debt capital to scale and demonstrate responsible innovation in lending to small businesses and underserved borrowers in the United States. CIM seeks to deliver positive social impact and attractive risk-adjusted returns with low volatility by investing in a diversified short-duration portfolio of marketplace loans originated by financial technology companies. Since 2014, CIM has provided more than $350 million of debt financing to 5,000 U.S. small businesses in 50 states, diversified across an array of industries including information technology, professional services, and retail trade. Across its portfolio, CIM funds 2-3 times more woman, minority, and veteran-owned businesses than banks and financial institutions.

“Our partnership with ImpactAssets is enabling a new wave of smaller-scale investors to channel their money into impact,” said Bettina von Hagen, Managing Director & CEO at EFM. “By investing philanthropic dollars into deep impact investment, the incredible ImpactAssets community is finding ways to expand the power and positive impact generated by their charitable giving.”

“We applaud ImpactAssets in broadening access to institutional impact investment funds for a greater number of investors by lowering their minimums and fees,” added CIM Managing Partner Michael Hokenson.

The EFM and CIM funds are available individually or through the turn-key ImpactAssets Impact Portfolios. They join a growing list of the world’s most innovative impact investing managers, including EcoEnterprises Fund, Iroquois Valley Farms, MicroVest and Sarona, and they are among a long history of high quality private debt and equity funds that have been offered by ImpactAssets. Through this suite of funds, donors have been able to construct their own ‘fund of funds’ portfolios that are customized to their interests, don’t have an extra layer of management and offer lower expenses.

“With the addition of these new funds, we are building a comprehensive suite of deep impact investing options of experienced managers with solid track records” said Sandra Osborne, Director of Investments, ImpactAssets. “Our donors are driving this innovation and helping us to propel impact forward.”

Photo courtesy of Sudipto Sarkar.