Investor’s Corner: Seven Steps to Allocating your Portfolio for Impact

For most investors, impact investing has remained largely confined to private investments, thereby only a small proportion of their portfolios. As opportunities for impact investing emerge across different asset classes, investors who seek greater impact and closer alignment between their investment activities and their mission and values, are now allocating more of their assets into generating greater social and environmental outcomes. The IIX Investor Team shares 7 simple steps to start allocating your portfolio for impact.

Step 1: Define Core Values and Mission

  • Identify core values, mission, country and sector preferences
  • Understand the motivation (e.g. preserving family legacy, or instilling values in the next generation etc.)

Step 2: Identify Target Impact Areas and Role of Investment

  • Identify your target outcomes and objectives (e.g. empowering rural women through education)
  • Define the risk/return profile of your investments (e.g. wealth preservation, commercial returns etc.)

Step 3: Integrate Impact Allocation

  • Determine allocation across asset classes: cash, fixed income, public/private equity, real estate, etc.
  • Distinguish between philanthropic and investment capital in the portfolio

Step 4: Evaluate and Select Investment Opportunities

  • Determine which investments should be non-impact, mission-related and mission-driven
  • Direct investments (e.g. private equity, debt, hybrids etc.)
  • Indirect investments (e.g. funds, funds of funds etc.)

Step 5: Implement a Strategy

  • Identify potential impact investment opportunities (e.g. using Impact Partners)
  • Commence due diligence, structure investment, execute and close transaction and if necessary, post-deal monitoring (IIX Investor Team can assist you with all these)

Step 6: Monitor, Analyze and Report Results

  • Measure financial, social and/or environmental returns
  • Insist on impact assessment report from a reputable assessor (e.g. Shujog Impact Assessment)
  • Identify a suitable impact methodology for the identified outcomes (e.g. Shujog, GIIRS, SROI)

Step 7: Consider Changes in Objectives, Strategy and Managers

  • Revisit country and sector focus
  • Evaluate investment financial and social/environmental performance
  • Assess asset allocation, risk/return profile and intended social and environmental outcomes

To start increasing your portfolio’s impact, contact us today at

By: En Lee, Head of IIX Investor Team and Sam Lindsay, IIX Investor Team