Impact Investing, or investing with the intention of having a positive social or environmental impact, has become increasingly popular in recent years. Once unheard of, it is now the center of an estimated $250 billion market.
As companies increasingly use Environmental, Social and Governance (ESG) measures to guide their business decisions, investors have turned towards impact investing. This socially-responsible investment can include everything from large corporations issuing a “green bond” (Apple did this to fund renewable energy in 2016), to mainstream investors giving money specifically to a company that conserves and restores forests, to local investors financing affordable housing projects in a community. Essentially, impact investing revolves around the idea that individual financial return can also have a positive public effect. Here are five fund managers that are currently at the forefront of the do-good, make-money market.
Vital Capital Fund
AUM: $350 million
The Vital Capital Fund focuses on improving communities in developing places, primarily Sub-Saharan African counties. Their funds bolsters education, clean water, healthcare and housing. Its primary goal in the last 30 years has been to develop reliable infrastructure. Vital Capital Fund also supports agro-industrial settlements in communities, focusing on business impact that benefits both the urban and rural African areas.
The Reinvestment Fund
AUM: $300 million
The non-profit corporation Reinvestment Fund’s mission is to increase opportunities for lower income families. This fund primarily addresses access to healthcare, housing and education in impoverished United States communities. The Reinvestment Fund prides itself on leading with data; it guides emerging programs using extensive public policy and data analysis. The Reinvestment Fund is revitalizing neighborhoods across the country.
Community Reinvestment Fund, USA
AUM: Over $250 million
The Community Reinvestment Fund, USA focuses on U.S. schools, communities and day care centers. Their main goal is to increase economic development and affordable housing in distressed neighborhoods. Just this past year, the fund partnered with U.S. Bank to provide extended access to credit for small businesses. They revitalize communities, bolster facilities and open jobs in megacities across the U.S.
BlueOrchard Finance S.A.
AUM: $3.7 million
BlueOrchard Finance has given microfinancing for over 37 million entrepreneurs worldwide since its 2001 start. The Switzerland-based fund targets financial inclusion, education and climate in its investing. The fund addresses a wide-range of sustainability and social obstacles, reaching 13 of the UN’s 17 Sustainable Development Goals. It initiates loans to developing businesses while improving education and investing in climate change adaptation. It also invests in women’s empowerment and job creation on a global scale.
Triodos Investment Management
AUM: $3.5 million
Triodos Investment Management is a subsidiary of Triodos Bank, based in the Netherlands. This firm invests in companies that develop solutions for sustainable real estate, food and agriculture in Asia, Africa, Europe and Latin America. It also aims to improve knowledge of and access to renewable energy. The Triodos Vastegoedfonds Fund invests in zero-carbon emission Dutch commercial real estate. Triodos wants to make impact investing the new normal.
All these firms know that impact investing is about more than just throwing money at a problem. It’s about developing solutions and connecting investors with the economy. It turns the private sector a profit, while making it a force for environmental and social change. It invests with the triple bottom line in mind: people, planet and profit. These are only five of many firms that focus on investing with good intentions. To get started with your impact investing journey, try to narrow down a specific place or population you want to help – then get to investing!