One of the primary challenges facing investors seeking to make market-rate, high impact investments outside public markets is that most private investment structures have high minimum-investment requirements, often above $1,000,000 per investment, that put this type of investing out of reach for many investors.
To address this barrier, New Summit pioneered a private high-impact “fund of funds” model that provides a typical New Summit investor with exposure to 10-12 underlying private fund investments. These funds target profitable, solution focused enterprises with measurable environmental and social impact across four different asset classes, including venture capital, private equity, real assets, and private credit. While this type of high-impact diversified portfolio would ordinarily require an investor to commit multiple millions of dollars across many different individual investments, New Summit makes its portfolio accessible to investors with a minimum of just $250,000.
Since 2016, New Summit has successfully launched two “funds of funds,” with a third expected to open in early 2021. Each underlying fund investment has passed the experienced investment committee’s rigorous financial and impact due diligence process and has been mapped to the UN Sustainable Development Goals. Detailed impact reporting is provided to investors on an annual basis. Sample investments from their first two funds include:
LYME TIMBER FUND IV
A private timberland-investment management organization that focuses on the acquisition and sustainable management of lands with unique conservation values. Since 1976, the Company has followed a disciplined and value-oriented approach to investing in forestland and rural real estate. Lyme seeks to enhance risk-adjusted returns to investors through identifying and realizing value from conservation opportunities. It does so by selling restrictions on land use that protect ecological and social value. The Fund’s portfolio includes more than 380,000 acres located across nine properties.
ROSE AFFORDABLE HOUSING PRESERVATION FUND V
Jonathan Rose Companies is a green real estate policy, a development project management, and an investment firm. It focuses on generating strong, risk adjusted returns by creating and preserving affordable, multi-family housing, implementing practical green strategies to reduce costs and increase efficiency, and increasing opportunities for its residents through health, education, and other social services.
ECOSYSTEM INTEGRITY FUND III
An early-stage venture capital fund that invests in companies contributing to environmental sustainability in areas such as renewable energy, transportation, food and agriculture, and water management. EIF uses a systems-based approach, spending several years studying target areas to identify opportunities where a pressing business need overlaps with a sustainability problem.
New Summit is deeply committed to measuring the environmental and social impact of its investments. In 2020 they partnered with the IMP+ACT Alliance to support the development of an impact classification system that categorizes impact into one of three categories: Act to Avoid Harm. Benefit Stakeholders. Contributes to Solutions. New Summit targets investments that contribute to solutions, from clean energy and organic food to ocean sustainability and underserved businesses. In its initial analysis of the first New Summit impact fund, they found that 85 percent of the portfolio contributes to solutions tied to the UN Sustainable Development Goals. New Summit will classify all its future underlying investments using this system, which they hope will gain traction with other fund managers in the impact investing ecosystem.
Photo: Residents of a Jonathan Rose property engage in community gardening.
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