We work with clients who want their portfolios to reflect their values, and impact investing can be an integral piece of that equation. Private impact investments that are designed to catalyze positive change and outcomes often complement traditional portfolios, whether by scaling renewable energy or providing underserved and underrepresented populations with access to capital.
Our history of assisting with the design and funding of impact investments across a wide range of geographies and industries is rooted in the same diligence process undertaken for conventional investments. We work to assure long-term sustainability of impact potential by emphasizing return of capital and focusing on the critical financial factors that correlate with the potential breadth and depth of the impact being delivered.
Impact Investment Priorities
Preservation of capital
We are careful to look closely at investment models to ensure they prioritize preservation of capital and put an emphasis on return of capital. When we can achieve these goals, we can help assure long-term sustainability of impact potential for each client we serve. Our desire is to see clients “recycle” their impact investment capital again and again to amplify social impact over their investing life.
We seek to invest in models that can be replicated to create impact in other geographic or industry areas. Replicable models allow for amplification of impact as new funding designs present themselves. This scale is what catalyzes systemic changes and proliferates desired outcomes.
Innovative capital stacks
We work with many congenial organizations to help design and improve investment models. Our goal is to create access for a broader group of investors to participate. This approach helps draw from different sources of capital, which we believe improves the durability and sustainability of impact investments.
As is the case with our public market investments, we seek out exemplary and forward-looking managements with which to partner. We look for leaders that prioritize transparency and have a clear sense of direction that aligns with the mission of their organization.
Many social and environmental issues can only be addressed productively in partnership and through integrated investment and grant opportunities. We look outside prospective investment organizations themselves to engage with the surrounding community. This gives us valuable information about the organization’s reputation, value as a partner, and other insights that can only be gained through firsthand experience.
Our history of collaboration with like-minded capital allocators and non-profits has led to our active involvement in both the local and national impact landscapes. In some cases, this allows us to make suggestions about the creation of investment structures and consideration of impact metrics that we believe will serve client interests and lead to opportunities for recycling capital.
Founders First Capital Partners
Founders First was formed to support businesses led by women, people of color, military veterans, and businesses in low-to-moderate income areas. At Reynders, McVeigh, we recognize this organization can create powerful drivers for employment growth where they are needed most, using flexible funding support and providing broader access to capital for underserved communities and constituencies. Founders First Capital Partners has also developed technologies and funding models that enable programs to be introduced across a wide range of communities and geographies. This type of widely replicable model creates the potential to drive significant and compounding social and financial impact through strong businesses that historically have not had access to capital.
Social impact: Revenue-based loans to companies led by people of color, women, veterans, and LGBTQ, historically underserved constituents.
A public benefit corporation, Sunwealth® is a clean energy investment firm on a mission. Built on an innovative, tech-driven approach, Sunwealth® partners with educational institutions, municipal buildings, non-profits, and other organizations to provide the upfront funding and back-end administration for solar projects. The approach promotes the democratization of clean energy, as most of participating organizations would have no viable way to cover the upfront capital to take on solar projects.
Social impact: Solar justice and reducing environmental emissions; providing energy savings to its solar customers; and creating local jobs.
WindSail Capital Group
A leading provider of growth capital to companies advancing energy innovation and sustainability, WindSail’s unique investment approach provides companies with flexible financing solutions that facilitate growth while minimizing dilution.
Social impact: Advancing energy innovation and sustainability across a wide range of industries.
All Investing has an Impact
At Reynders, McVeigh, we embrace the conviction that the most powerful investments emphasize both downside protection and upside potential – all while presenting opportunities to improve the world around us.
Our private impact investments are designed to allocate capital toward businesses serving true needs, addressing important challenges, and that can and deserve to be profitable. There is a wide range of potential financial returns in the impact space. While private impact investing can complement traditional portfolios, clients need to understand the risk and return profile for each impact investment and be ready to decide whether they are comfortable with the approach.
DISCLOSURE: This material is proprietary and may not be reproduced or transmitted to any third party or used for any purpose without the prior written consent of Reynders, McVeigh Capital Management, LLC. (“RMCM”). This material is for informational purposes. It does not constitute investment advice and it should not be relied on as such. It is not a recommendation to invest in a particular manner or to transact in a particular sector or a particular security. Certain statements may be deemed forward-looking, but any such statements are not guarantees of any future performance and actual results or developments may differ materially from those discussed. There is no guarantee that investment objectives will be achieved or that any particular investment will be profitable. Past performance does not guarantee future results.
The impact investments identified above represent a selection of our current impact investment recommendations on behalf of our advisory clients. They have been selected by the authors on an objective, non-performance-based basis to illustrate the views expressed in the commentary. The reader should not assume that investments in the impact investments, sectors, and/or manners discussed were or will be profitable. Past performance is not an indication of future results. Investment decisions should always be made based on an investor’s specific needs, objectives, goals, time horizon, and risk tolerance.
Certain impact investments are private, non-public offerings that are only available to accredited investors (individuals or business entities that are allowed to trade securities that may not be registered with financial authorities due to their income, net worth, asset size, governance status, or professional experience). These private, non-public offerings may experience greater volatility than traditional investments in publicly traded securities. Advisory clients should carefully review the pertinent documents for each impact investment for a more detailed discussion of the associated risks. Given the high-risk nature of impact investments, advisory clients should contact their portfolio manager to discuss risks and suitability prior to investing.