Impact Investing: Positively Addressing Challenges While Pursuing Financial Return

Families with significant wealth often tell us they wish to deploy a portion of their resources to make some kind of positive impact—broadly defined as doing good for people and the planet. We know that for many clients, the pursuit of impact is fundamental to their efforts to define their family or foundation legacy. While one way to achieve impact is by giving time and money to nonprofits and foundations, philanthropic activities can be complemented by impact investing.

Impact investments are made with the dual goal of return on investment and positive social and environmental good. Impact Investments can be made in all corners of the world, in frontier and emerging markets, developed economies and in our local neighborhoods. They can be made in all asset classes and in a wide range of risk levels, allowing for traditional portfolio construction utilizing asset allocation and diversification of risk.

Impact investments can be most rewarding when they reflect an investor’s passions. Impact investors have a lot to choose from today, as there is no shortage of opportunities to make an impact. Unprecedented global population growth presents our planet and institutions with mounting social and environmental challenges. Poverty and inefficient markets have created quality-of-life issues in all corners of the world, and our finite natural resources are increasingly strained from overuse.

Opportunities for impact investors fall broadly into these categories:

• Social Impact Investments, whichstrive to provide opportunities for better lives. These include health and wellness, education, microfinance, affordable housing/community development, and small business development initiatives.
• Environmental Impact Investments, which seek to reduce strain on Earth’s finite resources. These include natural resources conservation, sustainable/organic agriculture, clean water and sanitation, energy efficiency and clean energy production, and environmentally conscious real estate opportunities.

With so much to choose from, it can be difficult and overwhelming for families and foundations to decide how and where to direct their financial resources to achieve meaningful impact. So it is important to help them align their financial capital with their passions, beliefs and objectives. Private business, private capital and capital markets can have a tremendously positive impact on the economic, social and environmental conditions challenging our world.

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Jonathan Firestein, Managing Director, Private Capital and Impact Investing, Ascent Private Capital Management

Jonathan Firestein leads Ascent’s research efforts across investment opportunities in private capital and impact investing, working to connect client objectives and passions to personalized investment recommendations. Jonathan holds an MBA, MS Economics and BA Economics.

Sean Olesen, CFA, CAIA, Director, Private Capital and Impact Investing, Ascent Private Capital Management

Sean Olesen leads Ascent’s research efforts across investment opportunities in private capital and impact investing, working to connect client objectives and passions to personalized investment recommendations. Sean holds an MBA and BS International Economics.