Shocked impact investors in family offices are devoting their capital to their causes in reaction to the Brexit referendum result and Trump presidential election.
The role of advisers was also predicted to increase in value to impact investors, according to the T100:Launch, the debut report from a multi-year study of the portfolios of more than 50 Toniic 100% Impact Network members.
Alison Fort, Managing Director of Europe, said Toniic was fortunate to see the trends shaping the future of impact investing within its global network of individuals, family offices, funds and others who were committed to aligning their investments with their values across asset classes.
The San Francisco based nonprofit “action community” has already been contacted by progressive impact investors, one week into the controversial Trump presidency.
“The day after the US election I spoke to a woman in New York who wanted to join Toniic with her family,” Fort said.
“She predicted that Toniic would see a groundswell of new members because the world just received a ‘wake up call.’ For those that want to see reduced inequality and an end to climate change there is a feeling of urgency and a calling for individual actions. Aligning one’s capital with one’s values through impact investing is an appealing and increasingly accessible route to action.”
Fort said one consistent driver to impact investing Toniic had seen throughout 2016, which was validated in its research, was concern for the environment.
“Specifically, we’ve seen a trending attention among investors to the impacts of climate change and investment opportunities that involve remediating actions on the environment,” she said.
“I have heard through many of our investors that COP21 has been an important turning point. The unity and ratification of international climate goals has provided increased confidence for investment in renewable energy sources and triggered others to consider the risks of climate change in their investment decisions.”
The T100:Launch report found that the environment made up the largest percentage focus of impact investment; constituting 32% of the aggregated impact themes, nearly twice the next greatest area of investment. The enormity of the need, as well as a large pool of available investment opportunities, will mean that this sector remains strong over the next year, Fort said.
“Additionally, we discovered through the T100:Launch report that one of the greatest enablers for impact investing is the role of the adviser. In 2017 we anticipate that the role of advisers will come into focus for many impact investors. This may manifest in a number of ways, but I expect to see an increase in new advisers in the impact space: existing specialists in the field bringing impact value to new clients such as single and multi-family offices, advisers adopting an impact specialty in-house to realise positive measurable outcomes for their clients and new pure-play impact investment advisory firms being founded.”
Fort said the role of the professional adviser was increasing and positively impacted asset class allocation. A comparison of investor performance with and without advisers illustrated a “clear overall advantage” of having an adviser on-board, particularly in real assets and private equity.
“We see the role of the impact advisor continuing to grow in the family office–who with their help are able to organize investments more quickly and effectively,” she said.
“In fact, we saw in our research that with the help of investment advisers, some portfolios were able to move to 100% impact within their first two years of transition.”