Innovation in investment management isn’t always about creating entirely new asset classes. Sometimes it involves rethinking how existing opportunities are structured and delivered.
This is especially true in impact investing.
While the sector represents approximately US$1.57 trillion in assets under management¹ worldwide, and continues to grow at more than 20% annually, most impact investing opportunities remain inaccessible to everyday investors due to the way they’re structured.
A new Genus impact investing fund has been designed to broaden access for eligible investors who meet suitability requirements. “Impact investing shouldn’t be limited by the traditional structures of private markets,” says Stephen Au, Genus CEO. “Our goal is to open the door to a broader group of investors while maintaining the diversification, professional management and focus on measurable impact that investors increasingly expect.”
The Genus Impact Opportunities Fund combines impact investment opportunities in public and private markets in a single, diversified solution. This fund of funds broadens access to impact investments for a wider range of eligible investors.
“We believe the next chapter of impact investing is about making high-quality opportunities more accessible,” Au adds. “By bringing public and private impact investments together in one professionally managed solution, we’re creating a new way for more investors to participate in the potential of impact investing.”
Closing the accessibility gap in impact investing
Impact investing has historically been primarily accessible to a very limited group: accredited investors with significant assets, and those with the ability to commit large amounts of capital for extended periods of time. “But for many people and households, half a million dollars is a lot of money to invest and have locked up,” says Darryl Brown, Portfolio Manager at Genus.
For over a decade, we’ve made impact investing more accessible to investors through our High Impact Equity Fund, which has given investors access to a diversified portfolio of publicly traded global companies aligned with some of the United Nations Sustainable Development Goals (UNSDGs).
But on the private side, the offerings have been somewhat limited. Our Impact Investment Counsel team has worked to research and evaluate private impact funds that invest in areas such as sustainable agriculture, climate solutions, Indigenous entrepreneurship, community finance and other initiatives aligned with the UN SDGs.
These investments have provided opportunities to create highly targeted, measurable impact. They also come with accreditation requirements (qualification requirements are subject to NI 45-106). For the many investors who want to make a tangible difference, these opportunities have simply been out of reach.
A new approach: blending public and private impact
Our Genus Impact Opportunities Fund is designed to address these barriers.
By combining carefully selected private impact investments with publicly traded impact equities, the fund aims to provide investors with diversified exposure to impact while offering greater flexibility than many standalone private investments – and brings these opportunities together within a single professionally managed investment solution.
“Packaging these investments together provides greater diversification, subject to certain redemption provisions,” Brown says, referring to the fund’s quarterly liquidity structure².
This approach recognizes an important reality of private investing: some of the most impactful opportunities require patient capital. Whether it’s financing climate solutions, supporting Indigenous entrepreneurs or helping small local businesses grow, these investments often need investors to commit their capital for longer periods of time.
By combining private investments with liquid public market holdings, the fund strikes a balance between long-term impact, portfolio diversification and access to liquidity. And the result is a solution designed to make private impact investing more diversified and more accessible than it has traditionally been.
As Brown puts it, the goal is simple: “provide liquidity and diversification within a meaningful impact investment opportunity that is accessible to far more investors.”
Lowering the threshold to impact investing
Perhaps the most exciting aspect of this approach is the accessibility it creates.
Our objective is enabling more people to gain exposure through a smaller allocation within a diversified portfolio.
That shift allows investors who previously could not access private impact opportunities to now allocate a portion of their portfolio toward investments that have the potential to generate measurable environmental and social outcomes across diverse impact themes and sectors alongside financial returns.
“The part that gets me excited is that I know a big portion of my clients who meet the suitability requirements will want this kind of access,” Brown says. “Even clients who have under 100k in their portfolio could be part of this fund.”
Innovation that reflects today’s investor needs
As investors increasingly seek portfolios that reflect both their financial goals and their values, solutions that combine diversification, professional management and broader access will play an increasingly important role.
And when access expands, impact expands with it. By lowering barriers to entry and broadening access to high-impact investments, we can help more people invest in line with what they care about – and in doing so, help more capital flow toward solutions that make an impact.
Interested in exploring how to build an investing strategy that aligns with your values? Speak with a Genus advisor today.
References
¹ Xiao, D. H. M. U. H. P. K. (n.d.). Sizing the impact Investing Market 2024. The GIIN. https://thegiin.org/publication/research/sizing-the-impact-investing-market-2024/
² The liquidity features are subject to limit and rules on redemptions, which are at the discretion of the Investment Manager to exercise, referred to as gating provisions. With the gating provisions, the Investment Manager may limit or suspend redemptions for a period of time, triggered by prescribed thresholds indicating stress in market conditions or substantial tightening of liquidity in the markets, during which it may not be possible to reasonably determine the fair value of the assets of the Fund or there is not sufficient liquidity that can be made available to investors who request redemptions. The thresholds for the potential triggering of the gating provisions are a function of the amount of illiquid assets within the Fund relative to the net asset value of the Fund and/or the cumulative amount of redemption requests from investors that are unfilled. Please check with your portfolio manager for details on the gating provisions and refer to the relevant fund disclosure documents and offering memorandum.
This document is provided for general information purposes only and is not a substitute for professional advice. It does not constitute investment, legal, accounting, tax, or other advice or recommendations, nor should it be relied upon as the basis for any decision. Readers should seek specific professional guidance before making financial or investment decisions. Certain information herein is based on third-party sources believed to be reliable, but its accuracy and completeness are not guaranteed. Past performance is not a guarantee of future results.
