The Changing Paradigm of Mainstream Impact Investment

By July 21, 2017News, UNITED KINGDOM

Red Ribbon Fund Management has long been committed to Impact Investment Strategies. For more than a decade it has been at the cutting edge of strategies that not only look to deliver above market rate returns for its investors, but also to achieve the best, most positive impacts on our communities, our wider society and on the environment generally. It is important that these strategies are also sustainable, offering long-term solutions within the mainstream economy; because the Fund Managers at Red Ribbon understand short term, one off interventions however positive their transient impact might be, can only ever be of limited significance to the wider community.

Just think for a moment of the difference between a one off famine relief effort in Darfur and a commercially viable project that will build up the same region’s agricultural infrastructure. There is a world of difference, precisely because commercial viability is the single biggest driver of long-term economically sustainable projects.

That’s what Red Ribbon means by Mainstream Impact Investment: investing in worthwhile projects that are commercially self-sustaining: because they deliver commercial returns for investors as well as a positive impact for our wider communities. It’s not just about doing the right thing, it’s about commercial common sense as well.

And after ten years, it’s a message and a mission that is attracting increasing levels of support amongst the wider investment community as well.

Take Morgan Stanley which last month raised in excess of $125 Million in final commitments for its first Global Impact Investment Fund (the Integro Fund). Launched in conjunction with the Morgan Stanley Institute for Sustainable Investing, Integro is now planning to invest exclusively in Private Equity Funds offering above rate market rate returns but which at the same time demonstrate a potential for positive environmental or social impact (or both).

It rings a bell doesn’t it?

In their Press Release issued at the time of the launch, Morgan Stanley explained that they were expecting the Integro Fund to maximise commercial returns for investors, but also to increase access to quality jobs, education and healthcare along with other socially beneficial outcomes; as well as striving to impact the environment in a positive manner and reduce the effects of climate change.The Investment Managers at Morgan Stanley’s Integro Fund also plan to provide detailed, impact-related reporting alongside traditional financial statements for its investors; and that too has long been a central component of Red Ribbon’s investment strategies. Red Ribbon Fund Management favours companies just like these: companies that are able dispassionately to calibrate the negative and positive impacts of their economic activity as well as being transparent with key internal and external stakeholders on just what those impacts are. Red Ribbon believes that more responsible corporate conduct is likely to be driven by such transparent policies and the better levels of social engagement that it engenders.According to The Global Impact Investing Network, 90% of investors in Funds pursuing an Impact Investment Strategy have reported that returns on their investments either met or exceeded expectation, which may help explain why Impact Investment Strategies are gaining so much traction at the moment. In 2013 an estimated $46 Billion was allocated to impact investing; that figure had grown to $77.4 Billion by 2015 and The Monitor Institute predicts it will reach $500 Billion by 2020.

Commercial returns combined with long-term economic growth; and social growth that is capable of making a real difference to our world. It’s the Red Ribbon way and it’s what makes Mainstream Impact Investment so important.

Read about The Global Impact Investment Network

Read about The Monitor Institute

Read about Red Ribbon’s Fund Management Strategies 

Read about Morgan Stanley’s Integro Fund 

Sarah

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Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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