This fall, the Sorenson Impact Institute moved into its new home at the University of Utah, the Impact & Prosperity Epicenter. The hub for social impact, community engagement, and enterprise also houses nearly 800 students.
For the first in his series of Finding Alpha podcast conversations, ImpactAlpha contributing editor Robert Brown caught up with founder Jim Sorenson to talk about the building of an impact investing ecosystem. In addition to the institute, the Sorenson Impact Group includes a foundation and an investment advisory and asset management group.
Over a period of three years, the foundation moved to align its approximately $142 million in assets (as of 2022) with its impact objectives (see the foundation’s 2023 impact report).
“And since that time, we’ve beaten the benchmarks by about 130 basis points,” Sorenson tells Brown (disclosure: Sorenson Impact Foundation is an investor in ImpactAlpha).
Impact allocations
“What we hope to give our listeners in the series is insights into the real-world decisionmaking process behind all those allocations,” says Brown, chief impact officer of Impact Evaluation Lab.
Sorenson, for example, says that newer and younger fund managers are outperforming those with more experience, “and they’re more authentic.” Backing such emerging managers would traditionally be considered risky. “ We found that to be the brighter part of the performance in our portfolio and, in fact, outperforming some of the named funds that that you and I know out there.”
What’s he looking for? “We love to see investments where every dollar generated from the business is correlated to furthering the impact so there’s a tight correlation.”
Sorenson tells Brown that he lives by his father’s advice, “’The best is yet to come.’ That has served me well, as I’ve encountered problems and challenges but also opportunities. The best is yet to come.”
Trump-era playbook
In a post-election followup, Sorenson said he is “cautiously optimistic” about opportunities to advance market-based solutions for inclusive wealth building and economic mobility in the Trump era. Impact investors will need a new playbook.
“Wherever you can align an issue or a theme with what Trump has won or championed or promised, there’s opportunity,” Sorenson told ImpactAlpha. “He’s made a lot of promises and he needs to deliver now.”
Sorenson points to progress in Trump’s first term on Opportunity Zones and the Build Act, which established the US International Development Finance Corp. Opportunities exist now to enact policies like the Employee Equity Investment Act to expand financing for businesses that extend ownership to employees.
What are the risks? “I believe that investors should have the freedom to invest where they want to invest,” he says. “Anything that would restrict that freedom, obviously would be of concern to me.”
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