Slides for Toronto's First Impact Investment Fair May 30, 2013 at the Centre for Social Innovation - Regent Park.

1. Toronto’s 1st Impact Investment Fair
Featuring
Meet & Greet with
@

2. Defining Impact Investments
Impact investments are investments intended to
create positive impact beyond financial return.
Blended Return = Financial + Social Returns
Financial
Social
Blended
0%
2%
4%
6%
8%
ROI

3. Modern Portfolio Theory
-Assumes that financial returns come with risk
-Higher risks demand higher returns
-Some investments are negatively correlated
(ie. when stocks go down, bonds go up)
-Diversification is a good thing
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

4. Modern Portfolio Theory
-Systemic risk is any risk that affects the entire
financial system (ie. the crash)
-Since most impact investments are not traded
in the traditional system, they aren’t subject to
the same level of systemic risk
-Investors can strengthen their portfolios with
impact investments (diversification)
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

5. Asset Mix
Rule of Thumb:
your age = the % of bonds in your portfolio
Bonds = 40%
Can. Stocks = 20%
US Stocks = 20%
Global Stocks = 20%
20%
20%
20%
40%

6. Bonds = 30%
Can. Stocks = 20%
US Stocks = 20%
Global Stocks = 20%
10%
20%
20% 20%
30%
Impact Bonds = 10%
Asset Mix
Impact investments can make a
portfolio more diversified

7. Suitability
-Always consider impact investments within the
context of your entire investment portfolio
-Don’t have more than 15% of assets in any
one investment
-Make sure you won’t need the money before
maturity, and are comfortable with the risks
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

8. Accredited Investor?
-Owns financial assets of more than $1M
(net of liabilities)
-Net income of more than $200K each of the
past 2 years
* Only applies to a small handful of impact
funds in the room

9. Renewable Energy Co-ops
-Equitable legal structure
-Investors must be members of the co-op
-Equal voting rights (one member one vote)
-Benefit from Ontario’s feed-in tariff for
renewable energy
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

10. Co-op Bonds - Risks
-Transparency risk: Low
-Default rate: UNKNOWN
-Liquidity risk: HIGH
-Duration risk: Moderate
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

11. MicroFinance
-Tiny loans to businesses in emerging economies
-Replaces the need to use loan sharks
-Loans are repaid over time incl. interest, allowing
for reinvestment (recyclable philanthropy)
-Creates employment and stronger local
economies (internationally)
-Relative strength of the Canadian dollar
multiplies the impact

12. MicroFinance - Risks
-Transparency risk: HIGH
-Default risk: Low
-Liquidity risk: HIGH
-Duration risk: Moderate
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

13. Social Enterprise MicroLoans
-Small loans to social entrepreneurs ($1k - $25k)
-Creates meaningful employment and stronger
local economies (in your backyard)
-Can be used to finance startup or expansion
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

14. Social Enterprise MicroLoans - Risks
-Transparency risk: Depends on reporting
-Default rate: Depends on company’s stage
-Liquidity risk: HIGH
-Duration risk: Moderate
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

15. RRSP, TFSA
-Currently, most impact investments are not
RRSP or TFSA eligible
-Some impact investments have been included
in RRSP accounts, but the future is murky
-It’s best to assume non-eligibility, and to
subtract taxes from your expected return
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

16. Questions to Ask
-What is the minimum investment?
-What is the duration of the investment?
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013
-What is the expected financial return?
-Is there 3rd party verification?
-Is the investment backed by an asset?
-What is the expected social impact?

17. Next Steps
-Connect with the organization and request an
investor package
-After doing your homework and speaking with
an expert, fill out the forms and write a cheque
-Sleep well, knowing that you’re making money
and a difference
Timothy Nash @timenash nash@sustainableeconomist.com May 30, 2013

18. THANK YOU
SustainableEconomist.com

19. socialinnovation.ca

20. optionsforgreenenergy.ca

21. solarbonds.ca

22. greenlifecommunity.ca

23. zooshare.ca

24. oikocredit.org

25. kulemelainvestments.com

26. accessccf.com

27. alterna.ca

28. riseassetdevelopment.com

29. youthsocialinnovation.org

30. trilliumhousing.ca

31. purposecap.com