An interesting report on mitigating impact investment risks has pertinence to the SIB domain. Most interestingly the notion of exit risk could surely (speaking from my own field of specialisation) be easily reduced by introducing a simple secondary trading mechanism via an exchange.
Enjoy the read…
Bridges Ventures and Bank of America Merrill Lynch have compiled a de-risking toolkit for investors considering impact investment.
Five risks are deterring investors from embracing impact investment, but the good news is all of them can be mitigated, according to Bridges Ventures.
The specialist asset manager worked alongside Bank of America Merrill Lynch to find resolutions to the most common barriers cited by investors.
These: capital risk, exit risk, being able to prove that diverting funds from other opportunities is worthwhile, transaction costs, and the perceived black box attitude to impact investments.
These complications have led to the two financial institutions producing a de-risking toolkit to encourage more institutions to invest in this sector.
For the five risks, some seven techniques were found by interviewing investors who were already investing in impact assets from around the world.
The full report can be found here.