Beats | April 28, 2017

How to build a total impact portfolio

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Carving out $10 million to do a few impact deals is no longer enough for many investors, says William McCalpin, managing partner of Athena Capital Advisors, an investment advisor in Lincoln, Mass., with $5.5 billion under management.

“Institutions want to drive this through their whole portfolio,” McCalpin told ImpactAlpha. “How do you construct a portfolio that does that?”

Athena has taken a crack with Building Impact Portfolios, which deconstructs the planning, execution and feedback phases of impact portfolio construction and advances Modern Portfolio Theory, the 65-year old framework for weighing financial risk and returns.

Athena’s guidelines do not offer step-by-step advice (even the examples provided within the framework are fictional), but do include a classification of impact themes and “preparatory due diligence” questions for investors in fixed-income, private debt, public equities and other asset classes.

Athena’s effort adds to a growing body of work around impact portfolio management. The Hong Kong-based RS Group has published an accounts of its approach, while the 100% Impact Network from Toniic has tools to help guide members’ investment strategies.

This post originally appeared in ImpactAlpha’s daily newsletter. Get The Brief.

Photo credit: Moneta Group