Impact Investing Consulting Strategies for Success

Impact investing consulting can seem daunting, but with the right strategies, you can achieve success. A clear investment thesis is essential, as it helps you focus on specific impact goals and outcomes.

According to research, 71% of impact investors have a clear investment thesis, which guides their investment decisions. This thesis should be based on your values, goals, and risk tolerance.

A well-structured impact investing portfolio requires a mix of asset classes, including private equity, fixed income, and public equities. A study found that a diversified portfolio can lead to better risk-adjusted returns.

Effective impact investing consulting also involves ongoing monitoring and evaluation of your portfolio's performance. Regular impact assessments can help you stay on track and make adjustments as needed.

We leverage our manager research on MercerInsight to help identify opportunities across traditional and emerging asset classes. This research is also available through our MercerInsight Community.

Our consulting team can guide the development of your impact investing approach, seamlessly calibrating it to fulfill your aspirations. They can provide consulting advice on the execution of an investment plan to help you achieve your ESG and financial ambitions.

We offer flexible services that can be tailored to your requirements, whether you want to delegate your investments to us or create a bespoke investment solution that combines your desired level of impact, risk, and financial return.

Defining your approach to impact investing is crucial to achieving your goals. Impact investing starts where ESG ends and spans opportunities that deliver varying market rate returns.

There are different approaches to sustainable investment, including ESG integration and screening, thematic investing, and impact investing. Our team can help you review your objectives against your investment goals, defining an optimal strategy that balances your ESG ambitions with returns.

To define your approach, you can leverage our manager research on MercerInsight and access our strategic research via the MercerInsight Community. This can help you identify opportunities across traditional and emerging asset classes in both public and private markets.

Our consulting team can guide the development of your impact investing approach, seamlessly calibrating it to fulfill your aspirations. They can also provide consulting advice on the execution of an investment plan to help you achieve your ESG and financial ambitions.

You can delegate your investments to us, or we can work with you to create a bespoke investment solution that combines your desired level of impact, risk, and financial return. We flex our services to your requirements.

At the heart of our approach is a commitment to diversity and inclusion. We believe that a diverse and inclusive team is not only the right thing to do, but it also makes us better investors.

We're inspired by the example of large foundations that have made organization-wide diversity, equity, and inclusion (DEI) efforts a priority. These foundations have seen firsthand how DEI can shape the structure of the investing department.

Interviews with executives at eight large foundations that have embraced DEI efforts reveal that it can significantly impact the work of investment committees. These committees are responsible for making informed investment decisions that align with the foundation's mission and goals.

The choice of investments is also influenced by DEI considerations. Foundations that prioritize DEI are more likely to invest in companies that have a track record of promoting diversity and inclusion in their own operations.

We're fortunate to be part of a robust impact investing ecosystem in the Northwest, which we actively support through our network, programs, and publications. This ecosystem is made up of various organizations working together towards a common goal.

The Annie E. Casey Foundation is one of the key players in this ecosystem, actively promoting impact investing. Similarly, the Bill and Melinda Gates Foundation is another prominent member, leveraging its resources to drive positive change.

Some of our members and partners with active impact investing programs include:

These organizations are working together to create a more equitable and sustainable future for all. By supporting and learning from one another, we can achieve greater impact.

Impact investing is a great way to make a positive impact on the world while also generating financial returns. IDEAS has a wealth of experience in creating and growing social enterprises, including TecAp, the first microfranchise in Nicaragua, which trained 76 youth solar installers and 100 women salespeople to sell solar items.

IDEAS personnel played a key role in the early development of Social Performance Management (SPM), which helps organizations measure and improve their social impact. SPM is now a global management style that puts clients at the center of organizational decisions.

To get started with impact investing, consider the following steps:

IDEAS has a wealth of experience in consulting for impact investment funds. They've done due diligence and site visits for microfinance institutions in Latin America, which were borrowers from Partners for the Common Good 2000 Loan Fund.

The firm's expertise in this area is impressive, having worked with a variety of organizations including Calvert Impact Capital, where they provided recommendations for lending in the fair trade coffee sector. This led to a significant increase in lending to fair trade coffee cooperatives in Latin America.

IDEAS has also worked with Oikocredit, the largest lender to microfinance in the world, and NOVIB, both of the Netherlands, providing capital markets consulting and due diligence in Latin America. This experience highlights the firm's ability to navigate complex international markets.

In addition to their work with Oikocredit and NOVIB, IDEAS has also provided consulting services to Working Capital for Community Needs, a nonprofit organization that provides loans to community-based ventures. They conducted a quantitative survey of the organization's investors and qualitative interviewing of individual donors.

The Reinvestment Fund, a nonprofit community development financial institution, operates primarily by assisting distressed towns and communities in the United States. They also provide public policy advice and data analysis services to U.S. cities.

Vital Capital, a private equity fund, invests in developing areas, principally sub-Saharan Africa, in businesses and projects designed to enhance quality of life and offer substantial investment returns. The fund's primary investment focus is on the development of infrastructure, housing projects, agro-industrial projects, renewable energy, healthcare, and education.

BlueOrchard Finance S.A., a commercial manager of microfinance debt investment, provides both debt and equity financing to businesses and institutions, with an emphasis on alleviating hunger and poverty, fostering entrepreneurship, and working on climate change issues. As of publication, BlueOrchard has invested in more than 200 million entrepreneurs around the globe.

Vital Capital is a private equity fund with approximately $350 million in assets, primarily investing in developing areas, particularly sub-Saharan Africa. The fund focuses on businesses and projects that enhance quality of life and offer substantial investment returns.

Vital Capital's investment areas include infrastructure, housing projects, agro-industrial projects, renewable energy, healthcare, and education. One of their notable investments is the Luanda Medical Center in Angola.

Vital Capital's approach to impact investing is centered around creating a positive social impact while generating financial returns. They aim to make a difference in the lives of people in developing areas through their investments.

Here are some of the areas where Vital Capital focuses its investments:

By investing in these areas, Vital Capital seeks to create a positive impact on the communities it serves while generating returns for its investors.

Philanthropy Northwest is a key player in building capacity and supporting foundations to use impact investing in the region.

Their team offers a full suite of services to help you explore, launch, or deepen an impact investing program, including consulting and guidance.

You can reach out to Philanthropy Northwest's Membership Director, Danielle Crystal, for a no-cost consultation to arrange a meeting and discuss your impact investing efforts.

Their consulting team at The Giving Practice is experienced in helping foundations like yours get started with impact investing.

Here are some ways they can support you:

By taking advantage of Philanthropy Northwest's services, you can strengthen your impact investing efforts and make a meaningful difference in the Pacific Northwest.

He helped establish 5 financial institutions that have made a significant impact in Latin America and beyond.

One of the first financial institutions he helped establish was Working Capital for Community Needs (WCCN), which lends in 7 countries in Latin America. WCCN borrows from hundreds of individuals, churches, and foundations.

He conceptualized and created a non-profit microfinance institution (MFI) in Nicaragua called PRESTANIC, which was the first Latin America MFI to depend on socially responsible investors for all of its lending capital.

Here are some of the financial institutions he helped establish:

These institutions have had a lasting impact in the communities they serve, providing access to financial services and supporting economic development.