Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

19992

Latest Athena research offers new approach in measuring impact investments

RELATED TOPICS​

A new research paper from Athena Capital Advisors – Social Finance and the Post-Modern Portfolio: Theory & Practice – offers advisors a simple approach to accommodate and measure the distinct social values of their clients.

Authored by several members of the Athena portfolio management and research teams, and published in the Journal of Wealth Management, the research and its findings support a new approach to Modern Portfolio Theory that introduces metrics of social return in the construction of portfolios, to accommodate the unique goals of individual investors or institutions pursuing values-based investment strategies. The article appeared in the Spring 2016 edition of the Journal, which was published on 29 January, 2016.
 
“Historically, it’s been difficult to measure impact investments because most investors reside at different points on the ‘social return’ spectrum; some may be seeking the largest possible social impact from their investments and others may desire the highest risk-adjusted returns while staying aligned to their social values,” says Athena Founder, CEO and Chief Investment Officer Dr Lisette Cooper. “Through this research, we sought to advance the current thinking around how to quantify and measure impact investments. Until now, the existing literature hadn’t accounted for the personal and subjective components that are inherent to values-based investment strategies.”
 
The growth of the values-based investing segment has been well documented. As of 2015, the signatories to the United Nations Principles for Responsible Investment controlled roughly $59 trillion in assets, while the latest estimates calculate roughly $60 billion of total assets under management dedicated directly to impact strategies. With experience in values-based investing that spans over ten years, roughly 25 per cent of Athena’s clients incorporate impact strategies either within or throughout the entirety of their investment portfolios. The firm’s capabilities in this area extend to all major asset classes, and include impact, ESG and SRI screening or shareholder activism.
 
Beyond introducing a new lens through which to measure and quantify impact investments, the paper also proposes a simple approach to implementing values-based strategies. Utilising a heuristic approach to assess an individual’s or institution’s varying degrees of interest in certain causes, the model takes into account not only financial goals and risk tolerance, but also the social return goals and potential tradeoffs. The research also proposes strategies in reporting social return outcomes, while highlighting efforts from the Sustainability Accounting Standards Board (SASB), The Global Impact Investing Network (GIIN) and B Lab to introduce standards that would serve to further enhance impact measurement and reporting.
 
“This paper represents the culmination of decades of experience coupled with intensive research into the utility clients gain through making investments aligned with their personal values,” says Athena President and Deputy CIO David Lynch. “We’re proud to have made a meaningful contribution to advance the study and dialogue around impact investing and we believe this effort will help make these strategies more accessible to a wider range of investors and institutions.”

Latest News

Amid a challenging fund-raising environment, regulatory changes and technological advancements, distribution strategy is more important..
Theta Capital has launched its fourth Theta Blockchain Ventures vehicle to invest in core blockchain..
Rabobank has completed a series of groundbreaking pilots to execute more than EUR2 billion in..

Related Articles

British pound coin
Fixed income’s return to favour following widespread interest rate rises has led to investors overcrowding sterling investment grade credit, delegates at the Pensions and Lifetime Savings Association investment conference have heard...
Fixed income’s return to favour following widespread interest rate rises has led to investors overcrowding sterling investment grade credit, delegates..
Sustainable Economy Top Panel
Europe is driving the growth in sustainable investment with global assets under management in ESG-labelled funds passing USD2.8 trillion...
Europe is driving the growth in sustainable investment with global assets under management in ESG-labelled funds passing USD2.8 trillion...
Pension funds
UK institutional investors are questioning the value of investing in private markets despite pressure from government to finance the country’s net zero and levelling up ambitions...
UK institutional investors are questioning the value of investing in private markets despite pressure from government to finance the country’s..
Juan Nozal, Mapfre Asset Management
Juan Nozal, Fixed Income Portfolio Manager at MAPFRE Asset Management, talks about the outlook for fixed income assets over 2024, in what he predicts will be an outstanding year for this asset class...
Juan Nozal, Fixed Income Portfolio Manager at MAPFRE Asset Management, talks about the outlook for fixed income assets over 2024,..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by