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Anyone looking to help individuals and communities to have a better life may initially think of donating to charity or using a crowdfunding platform like GoFundMe. You hand over your money and get back the good feeling that you’ve helped a noble cause.
A new investment trust is hoping to offer a route by which philanthropic individuals can use their cash to help parts of the world and potentially enjoy a monetary gain.
Impact Investment Trust is seeking to raise $150m to invest in 10 to 15 funds, each likely to contain approximately 12 small to medium sized companies providing goods and services that could help communities in developing countries. Target sectors include education, healthcare, agribusiness and financial services.
How much could you make?
It hopes to generate 8% annual return for investors once the IPO (initial public offering) money is fully invested, which we’re told could take between 12 and 18 months. Investors will be charged a 1.25% annual fee.
The investment trust will park the cash in fixed-income impact investing bonds as a short-term measure before it decides which funds to back.
Retail investors will get a chance to take part in the IPO offer. Many of the major stockbrokers and investment platform providers are accepting applications via their websites.
Retail investors will get a chance to take part in the IPO offer. Many of the major stockbrokers and investment platform providers are accepting applications via their websites.
Proven expertise
The trust is being advised by Obviam which has been investing in impact funds for the past 19 years and even manages the Swiss government’s development finance portfolio.
Obviam’s chief executive Claude Barras says he expects most of the companies within the underlying Impact Investment Trust portfolio will be generating revenue and profit.
‘The funds within the Impact portfolio provide growth capital to companies, potentially making them acquisition targets for regional players in the future,’ he adds.
Barras gives the example of a firm which would be ideal for the new portfolio, being Ugandan pharmaceutical company APDL. ‘Uganda imports 90% of its drugs. APDL has managed to produce drugs locally which are sold for 30% cheaper than imports and the business is creating lots of jobs. That has a clear social impact.’
He anticipates the investment trust’s portfolio’s geographic exposure will be split into 40% Africa, 40% Asia and 20% in Latin America.
Impact won’t be the only one of its kind for long. The People’s Trust is expected to join the London stock market in September with a strategy of investing in a way that benefits society and investors with a targeted 7% annual return. (DC)
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