If you are seeking more than just a financial return on your assets, Colorado Capital Management can help. Our impact investing services are designed to provide you or your foundation with the opportunity to earn an attractive profit while also making our world more environmentally sustainable and socially responsible.
Many investors focus almost entirely on the financial aspects of their holdings. While they may be well versed with performance and pricing information, they may know little about how the capital they are providing will be used, and the effect it will have in the world. That is the realm of impact investing, which is concerned with both the financial return and the measurable social and environmental impact of an investment.
There is a long tradition of thoughtful investors pursuing multiple goals with their assets. Today this concept of investing for more than one purpose goes by many names including socially responsible, blended value, triple bottom line, mission related and impact investing.
Investor interest in this field is growing rapidly. Many new and exciting financial vehicles are coming to market. We group these securities into three broad categories.
- Loans with Purpose. Impact investors can earn modest to competitive returns loaning their capital to a wide range of potential borrowers. Some examples include: (1) buying tax exempt bonds that support affordable housing, health care, and education facilities, (2) making credit enhanced (low risk) loans to non-profit organizations involved in everything from empowering young women to bringing renewable energy, sustainable farming and clean water to rural villages, and (3) funding microfinance operations that provide bottom of the pyramid individuals, especially women, with the capital needed to start a business and break out of the cycle of poverty.
- Selective & Engaged Stock Ownership. We utilize powerful portfolio management tools that allow investors to exclude the companies they wish to avoid, and emphasize those with the best environmental, social and governance (ESG) practices. We also emphasize fund managers that take an active role in initiating proxy campaigns and rallying shareholders to refocus corporate management on important ecological and stakeholder considerations.
- Social Enterprise. Providing new capital to carefully selected ventures may offer the greatest potential impact and the closest alignment with investor objectives. Social enterprises are for-profit businesses, typically not traded on a stock exchange, that offer an opportunity for multiple bottom line returns (i.e., people, planet and profit). To provide effective diversification, we may recommend private equity funds that focus on green technology, local communities, bottom of the pyramid opportunities and/or real asset investing such as land conservation, sustainable timber, energy efficient real estate, solar power and wind farms.