Non-concessional impact funds are a type of private investment fund that aims to achieve social, environmental, or other beneficial outcomes while providing market-rate financial returns to investors. These differ from concessional impact funds, which may accept lower financial returns to achieve non-financial goals.
Some of these funds invest in specific sectors, such as renewable energy, affordable housing, healthcare, education, and sustainable agriculture, and focusing on that sector is a non-financial goal. is the main driving force. In other cases, the funds are intended to benefit specific communities that are underserved by financial markets or to ameliorate social ills such as racial or gender-based wealth disparities. In some cases.
For example, with regard to the latter, certain funds may seek to support the transformation of companies into employee-owned enterprises. This allows employees to build equity and stake in the company’s success. Many of these companies are likely to have a significant proportion of workers of color and female employees.
Other funds may help fund businesses that are ethnically or gender diversely owned or serve diverse communities. You may also support companies that offer great health benefits and competitive salaries.
Non-concessional impact funds use the powerful tools of capitalism for socially or environmentally beneficial purposes. These funds are increasingly leveraging those tools to deliver benefits to stakeholders beyond their direct investors by offering a variety of attractive investment strategies, accompanied by rigorous impact measurement. Some of these funds exist as one option in a broad menu from a diversified asset management company, while others are offered by specific focused sponsors.
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