The Top 5 Impact Investing Financial Firms
In this article, Anant JAIN (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) talks about the top 5 Impact Investing financial firms on the basis of assets under management.
Introduction
Impact investing is defined as an investment decision made with the aim to generate positive social and environmental impact that can be measured, along with positive financial performance. It is essentially an investment strategy that may take the form of numerous asset classes and may result in many specific outcomes. The main point of impact investing is to utilize money and investment capital for positive social results.
Impact investing considers both the physical investments of firms (on the assets side of the balance sheet of the firm) and their impact on the environment and society, and the financial investments of investors, debt, or equity (on the liabilities side of the balance sheet of the firm) to finance the physical investments.
Impact investing is concerned with investing in firms that will create measurable societal benefits along with positive financial returns. Impact investing focuses on addressing a social or environmental issue, such as education, gender equality, renewable energy, to name a few.
Asset Under Management (AUM) is the cumulative market value of investments, that a person or entity manages on behalf of their respective clients.
As published by BlueOrchard Finance (on 08/01/2020), the top five impact investing firms based on assets under management are:
- #1 Triodos Investment Management
- #2 Vital Capital Fund
- #3 BlueOrchard Finance
- #4 The Reinvestment Fund
- #5 Community Reinvestment Fund
#1 Triodos Investment Management
Impact Area: Renewable Energy
Location: Zeist, Netherlands
Year Founded: 1980
Triodos Investment Management, headquartered in the Netherlands, is a subsidiary of Triodos Bank (one of the world’s leading sustainable banks). Triodos has approximately $5 billion in assets under management. It is a globally acknowledged leader in impact investing. It offers investable solutions to solve today’s numerous significant sustainability challenges. Since 1995, Triodos has been actively involved in impact investing. Triodos is also one of the founding members of the Global Impact Investing Network (GIIN). Having more than 25 years of experience in impact investing, Triodos established its global expertise in Energy & Climate, Inclusive Finance, Sustainable Food & Agriculture, and Impact Equities & Bonds. The main areas where its investments are spread are Europe, South America, Africa, India, and Southeast Asia.
#2 Vital Capital Fund
Impact Area: Development
Location: Zurich, Switzerland
Year Founded: 2010
Vital Capital is a prominent impact investment, private equity fund. It primarily focuses on sub-Saharan Africa. Having more than 30 years of experience in Africa, its impact investing has delivered essential development growth to millions of individuals in low and middle-income communities. Vital Capital invests in businesses and projects designed to enhance the quality of life and offers substantial investment returns. With more than $350 million in assets under management, Vital Capital Funds primarily focuses on health care, agro-industrial projects, renewable energy, sustainable infrastructure, and education.
#3 BlueOrchard Finance S.A.
Impact Area: Microfinance
Location: Zurich, Switzerland
Year Founded: 2001
BlueOrchard Finance has invested more than $8 billion across more than 90 countries, including Asia, Latin America, Africa, and Eastern Europe. It has achieved an impact on more than 215 million people affected by poverty in emerging markets by providing them with access to financial and related services. BlueOrchard Finance was founded as part of a United Nations initiative in 2001 to mobilize market forces to alleviate poverty and empower them to create a better life. BlueOrchard Finance was the first commercial institution to microfinance investment globally. It provides both debt and equity funding to small businesses. It focuses on alleviating hunger and poverty, establishing food production and education programs, fostering entrepreneurship, and working on climate change issues.
#4 Reinvestment Fund
Impact Area: Community Development
Location: Philadelphia, Pennsylvania, USA
Year Founded: 1985
Reinvestment Fund is a national financial institution in the USA that generates opportunities for under-resourced people and areas via partnerships. Headquartered in Philadelphia, Pennsylvania, Reinvestment Fund has an estimated $2.5 billion in assets under management. The Reinvestment Fund finances housing projects, access to health care, educational programs, and job initiatives. Reinvestment Fund officially works with offices in Atlanta, Philadelphia, and Baltimore. It provides them with public policy advice and data analysis services to assist in developing community programs.
#5 Community Reinvestment Fund, USA
Impact Area: Community Development
Location: Minneapolis, Minnesota, USA
Year Founded: 1988
Community Reinvestment Fund (CRF) is a not-for-profit organization with a mission to empower people, improve their lives, and empower the communities through innovative financial solutions. Community Reinvestment Fund was founded in 1988, in Minneapolis, Minnesota. It is accredited as a community development financial institution. CRF develops products and services to increase the flow of capital to historically underinvested communities across the USA. With more than $3 billion in assets under management, CRF has utilized these funds to help increase job creation and economic development, provide affordable accommodations, and aid with communal amenities.
Related posts on the SimTrade blog
▶ Anant JAIN Impact Investing
▶ Anant JAIN Environmental, Social & Governance (ESG) Criteria
▶ Anant JAIN Socially Responsible Investing
Useful resources
Global Impact Investing Network (GIIN)
About the author
The article was written in July 2021 by Anant JAIN (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022).