IMPACT investing is becoming one of the hottest tickets in the markets as socially responsible investment factors start playing an increasingly important role in fund managers’ and the government’s investment strategies.While the industry remains small and the challenge is for managers to make competitive returns, the winds of change are blowing fast and well-placed managers are starting to gain significant traction.A forerunner in this market is independent, black-owned boutique asset manager Mergence, which has R12bn in assets under management. While it aims to generate competitive financial returns as it addresses social responsibility needs, its idea is to mainly use debt to raise the capital, rather than the popular method of taking equity stakes in a private equity venture.The main difference is that by linking funds to prime mortgage rates, for example, more security and stable returns can be achieved over the long term than the higher volatility that can be seen in private e...
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