In a world in constant change, and where economic markets are also evolving, more and more companies and ventures are launching projects that have a relevant degree of social and/or environmental impact. projects that have a relevant degree of social and/or environmental impact.

Today, start-ups and traditional companies alike are looking to introduce impact terms into their business models.. Governments, not oblivious to these changes, have begun to enact or modify laws in an attempt to promote, accelerate and regulate impact investments.

We also see that more and more investors, from institutional investors to individuals, are looking to invest in companies or investment instruments with a strong social and/or environmental impact strategy, breaking the paradigm of a two-dimensional investment. two-dimensionalRisk - Profitability, but now in three dimensionsadding the variable of Impact.

What is Impact Investing?

Impact investing, according to the Global Impact Investing Network (GIIN), is defined as an investment made with the intention of generating social and environmental impact while generating a financial return.nvestment made with the intention of generating social and environmental impact while generating financial returns. This type of investment is considered one of the most advanced types of investment, as it seeks to generate economic, social or environmental returns at the same time.

The 4 keys for an investment to be considered an impact investment: 

• Generate social and/or environmental impact: Support projects that have a positive effect on people and/or the planet.

• Generate financial return: The range of return can go from capital recovery, a below-market rate, to a market-adjusted rate.

• Intentionality: They have the intention and objective of achieving social and/or environmental impact.

• Measurable: There must be measurable evidence that value or impact has been created. Without measurement there is no impact investment.

Impact investment in Chile

It is estimated that impact investment funds currently manage assets of more than US$ 138.2 million (source ACAFI), generating profits for investors and at the same time solving social and environmental challenges.

Impact funds in Chile often follow the model of venture capital funds, but include instruments that go beyond equity, such as debt-type loans or convertible debt. equity, such as debt-type loans or convertible debt. Like venture capital funds, they diversify risk and return on investment.

They may be independent or affiliated with banks or economic development institutions. But there are also funds that finance other funds in order to offer scale and greater diversification to high net worth investors. offer scale and greater diversification to high net worth investors.

At FYNSA, our FYNSA Migrante Investment Fundhas a high component of social impact of a community without adequate without adequate access to financing, contributing and contributing indirectly to financial inclusion, which in turn reduces income inequality, significantly influencing people's quality of life, generating greater economic growth and reducing the poverty rate.The Fund also provides a financial return to its contributors.

Cristian Rodriguez P.

Private Debt Manager

Fynsa AGF