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Slides for Toronto's First Impact Investment Fair May 30, 2013 at the Centre for Social Innovation - Regent Park.

Slides for Toronto's First Impact Investment Fair May 30, 2013 at the Centre for Social Innovation - Regent Park.

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Impact investment fair Presentation Transcript

  • 1. Toronto’s 1st Impact Investment FairFeaturingMeet & Greet with@
  • 2. Defining Impact InvestmentsImpact investments are investments intended tocreate positive impact beyond financial return.Blended Return = Financial + Social ReturnsFinancialSocialBlended0%2%4%6%8%ROI
  • 3. Modern Portfolio Theory-Assumes that financial returns come with risk-Higher risks demand higher returns-Some investments are negatively correlated(ie. when stocks go down, bonds go up)-Diversification is a good thingTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 4. Modern Portfolio Theory-Systemic risk is any risk that affects the entirefinancial system (ie. the crash)-Since most impact investments are not tradedin the traditional system, they aren’t subject tothe same level of systemic risk-Investors can strengthen their portfolios withimpact investments (diversification)Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 5. Asset MixRule of Thumb:your age = the % of bonds in your portfolioBonds = 40%Can. Stocks = 20%US Stocks = 20%Global Stocks = 20%20%20%20%40%
  • 6. Bonds = 30%Can. Stocks = 20%US Stocks = 20%Global Stocks = 20%10%20%20% 20%30%Impact Bonds = 10%Asset MixImpact investments can make aportfolio more diversified
  • 7. Suitability-Always consider impact investments within thecontext of your entire investment portfolio-Don’t have more than 15% of assets in anyone investment-Make sure you won’t need the money beforematurity, and are comfortable with the risksTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 8. Accredited Investor?-Owns financial assets of more than $1M(net of liabilities)-Net income of more than $200K each of thepast 2 years* Only applies to a small handful of impactfunds in the room
  • 9. Renewable Energy Co-ops-Equitable legal structure-Investors must be members of the co-op-Equal voting rights (one member one vote)-Benefit from Ontario’s feed-in tariff forrenewable energyTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 10. Co-op Bonds - Risks-Transparency risk: Low-Default rate: UNKNOWN-Liquidity risk: HIGH-Duration risk: ModerateTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 11. MicroFinance-Tiny loans to businesses in emerging economies-Replaces the need to use loan sharks-Loans are repaid over time incl. interest, allowingfor reinvestment (recyclable philanthropy)-Creates employment and stronger localeconomies (internationally)-Relative strength of the Canadian dollarmultiplies the impact
  • 12. MicroFinance - Risks-Transparency risk: HIGH-Default risk: Low-Liquidity risk: HIGH-Duration risk: ModerateTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 13. Social Enterprise MicroLoans-Small loans to social entrepreneurs ($1k - $25k)-Creates meaningful employment and strongerlocal economies (in your backyard)-Can be used to finance startup or expansionTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 14. Social Enterprise MicroLoans - Risks-Transparency risk: Depends on reporting-Default rate: Depends on company’s stage-Liquidity risk: HIGH-Duration risk: ModerateTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 15. RRSP, TFSA-Currently, most impact investments are notRRSP or TFSA eligible-Some impact investments have been includedin RRSP accounts, but the future is murky-It’s best to assume non-eligibility, and tosubtract taxes from your expected returnTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 16. Questions to Ask-What is the minimum investment?-What is the duration of the investment?Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013-What is the expected financial return?-Is there 3rd party verification?-Is the investment backed by an asset?-What is the expected social impact?
  • 17. Next Steps-Connect with the organization and request aninvestor package-After doing your homework and speaking withan expert, fill out the forms and write a cheque-Sleep well, knowing that you’re making moneyand a differenceTimothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
  • 18. THANK YOUSustainableEconomist.com
  • 19. socialinnovation.ca
  • 20. optionsforgreenenergy.ca
  • 21. solarbonds.ca
  • 22. greenlifecommunity.ca
  • 23. zooshare.ca
  • 24. oikocredit.org
  • 25. kulemelainvestments.com
  • 26. accessccf.com
  • 27. alterna.ca
  • 28. riseassetdevelopment.com
  • 29. youthsocialinnovation.org
  • 30. trilliumhousing.ca
  • 31. purposecap.com