PIIN Insights: Fund Investment Strategy
The purpose of this research was to identify current impact investment opportunities for accredited investors based in Canada. Recognizing that there are numerous models of impact investing and investment opportunities across various asset classes, this specific research focused on the following investment model and investor profile, and similar research can be tailored to various investor profiles and preferences.
• Asset class: the focus of the research was focused on the Private Equity/Venture Capital asset class (the largest asset class within impact investing) and to investments in funds rather than individual companies directly.
• Focus geography: the research included investments targeting both developed and developing markets.
• Type of investor: the research assumed an investor profile of an accredited investor, individual or foundation
• Amount of investment: we assumed a desire to cumulatively invest $3mill - $5mill and thus focused on funds with a minimum investment of under $2mill USD. We did not consider funds focused on a narrow sector or region (i.e. Rwanda only, timberland assets only) to ensure the portfolio had sufficient diversity.
• Financial return: the research assumed investor preference for a risk adjusted market rate of return and excluded philanthropic funds and funds targeting below risk adjusted market rate returns.
• Timeline: the research assumed investor desire to commence actively place funds in fall/winter 2014 and was focused on funds currently open and raising investment.
The research looked at funds that fit the criteria of impact investing: investments seeking to create measurable social or environmental impact alongside a financial return.