"Unpacking the $100M Question: Navigating Placed-Based Investment Strategies
Last week, I had the privilege of participating as a panelist in a thought-provoking discussion on placed-based investment strategies at Impact PHL's Total Impact Summit. As our session ended, someone in the audience asked: "I have $100 million to invest. What would you do with that?" Regrettably, time constraints prevented us from delving deeply into this question. Therefore, I've taken the opportunity to dissect and explore it further here.
Before diving into specific investment options, it's essential to understand the terms and conditions accompanying the investment. If the investor has specific mandates or priorities, such as supporting local entrepreneurship or infrastructure development, the strategy should align closely with these directives. Alternatively, if the investment offers flexibility, the approach can be customized based on the unique needs and opportunities present in different communities. Also, even well-crafted investment policies might not contemplate factors that are important in making placed-based investments, such as investment vehicle types, process, metrics, benchmarking, and reporting standards. Gaining clarity on these and other aspects helps ensure that the placed-based approach is not only strategic but also aligned with the investor’s objectives and constraints.
With the investment context, we can start thinking about how to best invest in a place. The process goes something like this:
1. Conduct a comprehensive needs assessment: Identify areas with untapped potential for growth and development through a holistic assessment to lay the groundwork for targeted investment.
2. Engage stakeholders: Insights from local stakeholders provide invaluable guidance in shaping investment decisions that resonate with community needs.
3. Foster resilience: Investments in the local economy should lead to sustainable pathways to prosperity that benefit the entire community.
4. Enhance infrastructure and connectivity: Investments in critical projects lay the foundation for long-term economic growth and development.
5. Prioritize social equity and inclusion: Investments should ensure that opportunities for growth are accessible to all members of the community.
Deeply impactful placed-based investments take time to develop and execute. As with the best farm-to-table eateries, rushing the process tends to compromise the quality and integrity of the outcome. For those seeking a quicker route, they might want to stick to the drive-thru options in the marketplace, such as the many “impact” ETFs and mutual funds out there. However, most of these options do little to promote impact in the places that matter to you most. Patience, dedication, and local knowledge and specialized counsel are key to creating meaningful change in communities.
For additional information about the Total Impact Sumit: www.impactphl.org
