Impact Investing
Understanding Current Market Trends With Impact Investing And Identifying The Types Of Investments That Are Most Attractive To Investors.
UNDERSTANDING IMPACT INVESTING
mpact investing is driven by the desire to create positive social or environmental outcomes in addition to financial returns. Investors are increasingly interested in impact investment as they seek to align their values with their investments and support in addressing pressing global issues such as poverty, climate change, and inequality.
As investors seek to marry their values with their investments, there is growing evidence that impact investments can be financially viable, driving increased interest in the field. This sector will likely continue to grow as more investors become aware of the opportunities available in solving environmental and social issues. We foresee more investors turning to ESG (Environmental, Social, and Governance) criteria to evaluate investments.
The benefits of impact investing can not only be limited to only financial returns and creating positive social and environmental impacts. However, it can also provide investors access to new markets and alternative opportunities and give them a way to diversify their portfolios further and address global challenges. Additionally, impact investors may receive tax incentives, such as tax credits, for their investments.
Impact investment can take many forms, including direct investments in companies, funds, projects, social enterprises, and public markets. Such investments
Private Financial Advisory (PFA) can assist you with such initiatives and help you diversify our portfolios in various asset classes, including equities, fixed income, private debt, and real estate. PFA can also make impact investments in a variety of sectors, including renewable energy, clean water projects, healthcare, education, and affordable housing.
To conclude, impact investment is a type of sustainable investing focusing on investments that generate positive social and environmental impacts and financial returns.
BENEFITS:
- Positive Impact on Society: Impact and sustainable investing can positively impact society by investing in companies that are focused on creating positive social and environmental change. Investing can help reduce poverty, improve access to education, and promote environmental sustainability.
- Long-Term Financial Returns: Impact and sustainable investing can provide investors with long-term financial returns. By investing in companies focused on creating positive social and environmental change, investors can benefit from the growth of these companies and the positive impact on society.
- Diversification: Impact and sustainable investing can provide investors with broader diversification options and a way to minimise their investment risk.
LIMITATIONS:
- Lack of Liquidity: Sustainable investments can be long-term and illiquid investments. Unlike buying and selling shares, investors may be unable to sell their investments when they need liquidity. This can be an issue for investors who may require early access to their invested capital.
- High Fees: Impact and sustainable investing can be expensive, as many require specialised knowledge and expertise. This can lead to higher fees for investors.
- Limited Investment Opportunities: Impact and sustainable investing can be limited in the number of investment opportunities available. This can make it difficult for self-directed investors to find suitable investments.
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Exposure to the major asset classes, including equities, fixed interest, ETFs, managed accounts, managed funds, alternative investments, property-based assets (direct/managed funds), private debt investments, and portfolio management.
