By Ashley Moore
An Impact Fund®, a registered trademark of The Ohio Cooperative, is an impact investment vehicle dedicated to utilizing philanthropic capital to foster community development, job creation, and job growth.
Impact investments are investments made into companies, organizations, and funds with the intention of generating social and environmental impact alongside a financial return.
We use a defensive portfolio strategy, a method of portfolio allocation and management aimed at minimizing the risk of losing principal. Our strategy entails regular main street acquisitions to maintain asset allocation and a focus on the basics to defend against sensitivity to adjusted business cycle risk.
Our portfolio managers’ goal is to focus on the analytical side of balancing the impact investment portfolio by determining the appropriate level of risk based on its’ impact on the regional community. To successfully construct portfolios that maintains an in-depth understanding of community conditions, trends, and overall economic outlook.
With an open ended structure portfolio managers’ can reinvest capital and gains received from successful investments, operations, and exits while managing non-performing cash balances by raising capital as-needed. These opportunities make the Impact Fund® suitable for institutions who seek impact investment opportunities with a need for compounded concessionary returns and liquidity.
Notes of compounded return
The flexibility of compounded concessionary return strategies can be appealing to investors concerned about rising risk, but a mindful approach to duration can help create a portfolio well suited to navigate the challenging impact investment industry.
Compound return is achieved when you invest a certain amount of money at a particular rate of return. And, as soon as a return is received, along with the profits, you reinvest at a larger amount. This implies that as your profits increase so does your investing potential.
Impact investments take on the approach that builds tangible and intangible assets where the economic value is not traded off for social value which may result in below market returns.
The longer money is invested in an Impact Fund® the more it grows – thanks to compounded concessionary preferred return. This makes compounded concessionary returns very important to impact investors seeking returns.
The Ohio Cooperative portfolio managers oversees more than 80 Impact Fund® portfolios.