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

Monday, April 15, 2019

OpenInvest, the asset management platform that enables customization, direct indexing and impact investing at scale, announced today that it has added place-based impact investing to its offering for mission-driven institutions. The platform’s new cause allows charitable foundations, endowments and other institutions to target their investments to companies making a positive social, economic or environmental impact in particular geographies.

Place-based impact investing refers to deploying capital to address the needs of specific communities. There is an increasing trend of foundations committing a portion of their endowments to mission-aligned investing. U.S. foundations collectively hold an estimated $800 billion in their endowments, and about 95 percent of this generally sits on Wall Street or in mutual funds. Through OpenInvest, organizations can now amplify their impact and easily make allof their existing assets work for their communities, without changing their investment strategies or grant-making.

“Many U.S. endowments are invested in mutual funds or ETFs, and foundations often have a portion of their endowments invested in companies that are not aligned with their mission-driven work,” said Claire Veuthey, Director of ESG + Impact, OpenInvest. “As a result, there are an increasing number of foundations who want to move their money into mission-aligned investments, such as companies creating local jobs. OpenInvest’s place-based investing cause is designed for these foundations that seek to create a deeper impact and invest in creating resilient, sustainable and economically healthy communities.”

Place-based investing often takes the form of illiquid investments that are typically high-risk, making these investments inaccessible to most donor-advised funds and community foundations. OpenInvest has transformed place-based investing from a niche approach to a utilitarian investment strategy that can be implemented at the same cost and risk profile as most passive options.  By identifying top employers in the region of focus and increasing exposure to those companies, OpenInvest assembles portfolios that are both mission-aligned and financially equivalent to a traditional investment product like an index-tracking ETF.

OpenInvest seamlessly creates low-cost investment portfolios tailored to an organization’s mission, while tightly tracking market indices. Unlike mutual funds or ETFs, an OpenInvest portfolio provides granular customization, direct shareholder engagement, proxy voting, all while integrating real-time ESG data and reducing fees.

For more information on OpenInvest, please visit https://openinvest.com.

Photo courtesy of Sudipto Sarkar.