Foundations Increase Impact Investing

Hazel Bradford writes for Pensions & Investments magazine about the upswing in interest in impact investing from philanthropic foundations.

“We've seen more impact-oriented investment products, particularly those with some kind of track record,” said Reid Smith, a New York-based principal with Mercer Investments who focuses on impact investing. Those include strategies focusing on, for example, LEED certification and green building; moderate-income housing; and timber, with a conservation angle. “The challenge becomes, are there enough (such investments) for any particular foundation to align a significant part of their investment pool,” he said.

Arguing that impact investing is a good investment has become less of a challenge. “Historically, the knock was if you are going to do it, you are giving up on the return. Now you can have an impact-focused strategy that actually creates investment opportunities,” said Mr. Smith.