invezz.com: 3 Ways to Take Advantage of an Emerging Asset Class

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Following the launch of Deutsche Bank’s new £10 million social investment fund in the UK, http://invezz.com/analysis/alternative-investments claims more investors should explore and take advantage of the emerging asset class. In response, the investment portal released an article identifying three entry strategies investors can employ to reap the benefits of impact investments.

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Ethical investments that fund an existing project can be the least complicated and potentially most rewarding route to take

Ethical-investments.org released a new article today in response to the launch of Deutsche Bank’s latest investment fund in the UK. The financial company unveiled this week a £10 million social investment fund to support social projects with a financial return. The initiative, according to Colin Grassie, CEO of Deutsche Bank UK, “will help to create a new asset class that we hope will attract a wide range of investors and deliver a significant amount of money to social enterprises.”

Ethical-investments.org, an information destination for investors looking to engage their funds in ventures, which serve larger social and environmental purposes, strongly encourages corporate and individual investors to take advantage of the emerging asset class-- impact investments.

The article cites a report by J.P. Morgan, which identifies the new asset class as “intended to create positive impact beyond financial return.” The article further informs on the difference between traditional socially responsible investments (SRIs) and impact investments. The first class seeks to minimise business’ negative impact on society and the environment. The latter, on the other hand, proactively aims at creating added benefit.

J.P. Morgan predicts that this new category of ethical investments could generate between $400 billion and $1 trillion in funds by 2020 while returning gains between $183 billion and $667 billion over the same period.

In their article, the experts at ethical-investments.org identify three primary entry strategies investors can choose from to enter the market: investing directly in a project of their choice; channeling their capital via a select investment fund; and creating their own social entrepreneurship.

Ethical investments that fund an existing project can be the least complicated and potentially most rewarding route to take, according to the article. But disintermediation, the article warns, hides certain risks, such as potential scams. Ethical-investments.org advises investors, who choose this route to do their research and seek simple and straightforward business plans, which promise realistic returns. The Paradigm Project, a U.S. social entrepreneurship, which made headlines last month for its fundraising campaign, is a good example of what to look for in a project, claims the investment portal.

Paradigm’s goal is to supply eco-friendly cookstoves to poor communities in third world countries. To do so, the founders use a combination of charity and investment funds, which cover all manufacturing, distribution and operational costs of the enterprise. The company then generates revenue from the sale of carbon credits – tradable units awarded for each ton of carbon dioxide that Paradigm’s eco-friendly stoves prevent from entering into the atmosphere. The profits from offset sales are used to pay back investors and to fund other Paradigm social initiatives.

Ethical investments via select institutional funds are another way of going into the market, says the invezz.com article. The added benefit, it claims, is that fund managers typically screen their projects in advance, mitigating certain risks.

The third investment strategy, the article explains, allows investors to follow their heart by putting their capital into their own social enterprise -- the most complex route investors can take as they will need a sound and practical business plan to attract additional investments and to ensure real profits. For those, who don’t have the business savvy to pursue their vision, invezz.com notes that some financial institutions can offer guidance. For example, an integral part of the Deutsche Bank Fund’s mission is to use its financial experts and their expertise to advise enterprises on how to best utilise their funds to maximise profits.

To read the full article and to get more information about ethical investments, visit http://invezz.com/analysis/alternative-investments.

About Dezz
Dezz is a UK-based boutique digital media company providing original and reliable up-to-date information in the area of carbon credit trading and sustainable investments to large investment company decision makers, NGOs and to eco-minded individuals. Dezz Limited, 843 Finchley Road, London, NW11 8NA. Registered in England and Wales as a Limited Company. Company Number: 07376661

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