Solutions for your goals Case study impact investment
A successful entrepreneur decides she wants to give back to society. Her goal: promoting entrepreneurship among those less fortunate than her, while also earning a financial return on her investment. Credit Suisse helped her make it happen.
The entrepreneur had a very successful career in which she had built a prosperous business. The sale of her enterprise left her not only with a comfortable fortune, but also with a strong desire to use her wealth to give back to society. Her overriding goal was to help those who had been less fortunate than her. As a businesswoman whose strong entrepreneurial spirit had played no small part in her success, she wanted to do this in a way that both fostered entrepreneurship and offered the prospect of helping her grow her wealth sustainably over the long term. She was unsure, however, of the best way to proceed. Which is why she turned to Credit Suisse for advice.
Investing with impact
The Credit Suisse team realized that the entrepreneur’s goals could best be met through impact investing: an approach in which private capital is actively placed in enterprises that make a positive social or environmental impact. This has advantages both for society, as these enterprises directly contribute to environmental or social improvement, as well as for the investor, as they have the potential to generate returns.
As a leader in impact investing, Credit Suisse offers impact investment products across a wide range of innovative financial vehicles and across a variety of sectors, including microfinance, agriculture, the energy sector, education, and nature conservation. As active thought leaders in the field, we also provide analysis and arrange for education platforms to cultivate a dialogue among clients, experts, and opinion leaders.
A powerful five percent
After discussions of various options, the entrepreneur decided to allocate five percent of her portfolio to Credit Suisse’s responsAbility Fair Agriculture Fund, which provides working capital to fair trade cooperatives in developing countries. These cooperatives in turn help small farmers finance their crops and harvests as well as ensure the farmers get a fair price for their produce.
By investing in the fair agriculture fund the entrepreneur could be sure that she was supporting the farmers themselves with services that would bring them direct benefit. Investment by the fund helps these small business people not only improve their infrastructure. It also provides them a means to better their business skills. This helps them improve their businesses as well as their livelihoods, which in turn contributes to the well-being of their communities and broader society.
Just as importantly, the investment provided benefits for the entrepreneur and her portfolio. As a well-diversified fund investing across numerous commodities and developing economies it has little correlation with other asset classes and has historically provided stable returns. That makes it an ideal means of portfolio diversification.
The solution therefore proved an excellent entry point into impact investing for the entrepreneur. Working with Credit Suisse also gave the entrepreneur access to our impact investment network. This allowed her, together with others, to learn more about the approach and the industry – and so perhaps to make further such investments in the future.