Building and managing impact investment products

Introduction

Developing impact investing products is a relatively new field. While there is a fairly well-trodden path in venture capital and private equity, there is less of a track record in public debt and equity markets. But that is changing fast. Given the accelerated pace of impact product development, it is important that it is done well to protect the integrity of the impact investing market.

How to use these resources

After a reminder about the importance of a strong impact thesis and the need for a clear theory of change, the module looks at impact portfolio construction and impact portfolio risk management.

Resources in this module

Developing an impact investment thesis and process
Impact investment selection and portfolio construction
Risk Management
Regulation

Glossary of terms

We have put together a glossary of terms for impact investing

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Developing an impact investment thesis and process

Creating a Strong Investment and Impact Thesis

Global Impact Investing Network

Reading time: 3 minutes

A very short introductory article on the considerations a fund manager should make to create a compelling investment and impact thesis. The article covers the sort of questions a fund manager should contemplate, covering both the thesis and how it would fit in the marketplace. A variety of additional resources are identified from those relevant for first-time managers, various impact asset classes (private equity, private debt and real assets), and case study portfolio approaches for existing impact funds. 

What the reviewer found helpful:
“Useful links to additional resources for wider reading specific to different asset classes”

Chloe Mallo

Introductory

Impact investment selection and portfolio construction

The Investors Perspective: An Illustration of How We Can Build Portfolios that Match Impact and Financial Goals with Intentions and Constraints

Impact Management Project

Reading time: 30 minutes

The paper presents a framework for investors that encompasses the dimensions to consider when setting impact goals as part of their investment strategy and decisions. The paper then illustrates through model portfolios how it is possible to transition from a traditional portfolio to one with impact goals. The paper demonstrates how traditional asset allocation principles can be used to build a portfolio satisfying both the investor’s need for investment efficiency and their desire to incorporate impact goals.

What the reviewer found helpful:
“A great starting point for investors considering whether and how to incorporate impact goals into their investment decisions”

Yinni Hu

Introductory

✔ Recommended

Risk Management

There are no Introductory resources for this topic

Regulation