Impact Asset Due Diligence: Unleashing Financial, Relational, and Growth Advantages
What to consider
When it comes to impact investing, diligent assessment of assets is crucial for maximizing financial returns while driving positive social and environmental outcomes. Impact asset due diligence goes beyond traditional financial analysis by evaluating the social and environmental impact of investments. By integrating impact considerations into due diligence practices, investors can unlock a wealth of advantages and position themselves for long-term success.
Maximize Financial Returns & Impact:
By incorporating impact considerations into asset due diligence, investors can identify investments that not only generate financial returns but also create positive change. For example, many fund managers are opting to invest in sunrise industries like clean energy, battery storage, EVs, aggrotech, etc. By building this pipeline of impact investments, asset managers are broadening their portfolios to include sectors of tomorrow.
Build Trust & Strengthen Stakeholder Relationships:
According to Fidelity, 77% of Millennials have made an impact investment, but only 53% of advisors understand the concept well. Becoming a leader in the space not only builds trust and strengthens relationships with current stakeholders, but also gives asset managers a competitive advantage over their peers in this evolving space.
Drive Growth & Address Pressing Global Challenges:
Embracing impact investing allows firms to become involved in emerging sectors and underserved markets that are driving innovation and transformative solutions. This proactive approach not only diversifies portfolios but also aligns with the increasing demand for sustainable investments. By venturing into these new niches and markets, private equity firms can drive growth and address pressing global challenges while generating attractive financial returns.
As impact investing continues to reshape the investment landscape, conducting impact asset due diligence is no longer an option but a necessity for investors looking to maximize returns, foster strong relationships, and thrive in an increasingly responsible and purpose-driven economy.
At Cicero®, we specialize in delivering actionable insights tailored to power your firm’s impact strategy. With our industry expertise and leadership, our team, led by Jacob Allen, Doug Hervey, and Chase Harmon, can help you conduct impact asset due diligence, market assessment, portfolio growth and optimization, monitoring and evaluation, and exit planning. Contact us today to explore how impact investing can unleash financial, relational, and growth advantages for your firm. Together, we can make a lasting impact.