Charles Marsala Explains The Basics of Global Impact Investing

Charles Marsala November 23, 2014 0
Charles Marsala Explains The Basics of Global Impact Investing

Impact investing is one form of socially responsible investing and serves as a guide for various investment strategies.
According to the definition of the Global Impact Investing Network (GIIN): “Impact investments are investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below-market to above-market rates, depending upon the circumstances.”
Impact investing tends to have roots in either social issues or environmental issues. Impact investors actively seek to place capital in businesses, nonprofits, and funds that can harness the positive power of enterprise.
Impact investors are primarily distinguished by their intention to address social and environmental challenges through their deployment of capital.
Impact investing primarily takes place through mechanisms open to institutional investors. However a new class of web-based investing platforms, which aims to bring impact investing into the reach of ordinary individuals with average incomes now exists.
The number of funds engaged in impact investing has grown a 2009 report from research firm the Monitor Group estimated that the impact investing industry could grow from around US$50 billion in assets to US$500 billion in assets within the subsequent decade. Such capital may be in a range of forms, including equity, debt, working capital lines of credit, and loan guarantees.
All investment options utilizing this strategy involve risk and investors can lose their principal. Emerging market investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
About the Author: Charles Marsala is a Financial Advisor with Benchmark Investment Group with Securities offered through LPL Financial, a member FINRA/SIPC. He can be contacted at Charles.Marsala@lpl.com

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