Social Impact Investing

Segments of Impact Investors
High
Target Financial Return
none
none
Solely Return –
Maximizing
Investing
Financial Floor
(nominal principal)
Impact Floor
Target Social Impact
Financial First
Investors
Optimize financial returns
with an impact floor
impact
investment
Impact First
Investors
Optimize social impact
with a financial floor
layered structures
Philanthropy
high
Who can invest in the
impact investment sector?
While we have broken down our investor
groups into Financial First and Impact First
Investors, investors can engage in Impact Investments
on either side of this spectrum.
Some investors, such as Prudential’s Social Investment
Arm, have internal allocations for the
percentage of their total assets to be placed in
Financial First investments versus Impact First
investments. Investors who have the flexibility
to invest in either Financial First or Impact First
investments achieve different goals. Financial
First investments deliver strong risk-weighted
returns as well as positive social / environmental
impacts, while Impact First investments
can trail-blaze, to meet tougher social / environmental
challenges by accepting lower
returns or taking initial capital risk to allow new
types of funds to develop a track record. Finally,
some investors are bound by fiduciary
duties either set out in their mission statement
or governed by their legal status and are restricted
to only Financial First Investments.
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