"Impact investing is part of the large family of responsible investment.
In this approach, the financial investment will have a positive impact on society from an environmental, social or societal point of view. Return on this type of investment.
Impact investing focuses on society
Impact investing, in general, is defined by the Global Impact Investing Network (GIIN) as "investments made with the aim of generating, in addition to financial performance, a positive and measurable social and environmental impact". In other words, impact investing combines the objective of financial return and social impact. In terms of ESG (environmental, social and governance) ratings, impact funds focus on the S (social).
Originating in Anglo-Saxon countries, impact investing first developed in the unlisted asset class, then in listed companies. Today, all asset classes can offer an impact investment approach, including real estate.
To know: Globally, the impact investment market, as measured, has reached a value of US$715 billion*.
Impact investing in real estate
Real estate is one of the sectors where it is possible to measure the social impact of investments. Thus, according to FAME (Fédération des Acteurs de la Métropole) "impact investing in the real estate sector consists of placing funds in real estate vehicles that will generate both financial returns and also create a measurable environmental and/or social and/or societal impact. This means, for example, investing in buildings that have social housing or housing for the elderly or people in need of rehabilitation as their objective.
The SCPI Patrimmo Croissance of Primonial REIM France
An impact fund, Primonial REIM France's SCPI Patrimmo Croissance was created in 2014. Its objective is to invest in social or intermediate housing. In practice, the SCPI's capital is invested in the bare ownership of residential lots intended for rental, with the social landlord holding the usufruct. Acquisitions can thus be made of existing properties or properties to be built, and any income will not be returned to investors, the objective being to capitalize on the potential capital gains when the properties are resold. The Patrimmo Croissance SCPI has delivered a performance of over 5% every year since its creation. Past performance is not a guide to future performance.
*IGIN's 2020 Annual Impact Investor Survey. https://thegiin.org/research/publication/impinv-survey-2020
What are the risks?
Investing in SCPI units presents risks, including the risk of capital loss. The investment is considered to be illiquid and should be considered from a long-term perspective and for asset diversification. The management company does not guarantee the resale of units. The potential income of the fund and the value of the units are not guaranteed. They may go up or down depending on the fund's performance, real estate market trends and economic conditions.