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Article
Publication date: 18 August 2021

Sarah Louise Carroux, Timo Busch and Falko Paetzold

This paper aims to empirically describe the general characteristics and the investment behavior of high-net-worth individuals (HNWIs) who pursue impact investing.

Abstract

Purpose

This paper aims to empirically describe the general characteristics and the investment behavior of high-net-worth individuals (HNWIs) who pursue impact investing.

Design/methodology/approach

Data was collected from members of a global impact investor network, using an online questionnaire, a portfolio-data collection tool and semi-structured interviews.

Findings

Wealthy private impact investors are largely similar in terms of their general characteristics and investment behavior, but they diverge in their interest in specific Sustainable Development Goals (SDGs). They tend to be strongly values-driven and to adopt an investment time horizon of 7+ years for their impact investments, which they expect to yield financial returns that are no different from those of traditional investments. Interestingly, these investors perceive the well-established sustainable investing strategies of exclusion, environmental, social and governance (ESG) integration and best-in-class as not having high impact-generating potential.

Practical implications

Suggestions are provided about how wealthy private investors could use the findings to improve their impact investment decisions. Advice is offered to investment professionals on how to optimize impact investment products and services for this economically and societally highly relevant target group.

Originality/value

To the best of the authors’ knowledge, this is the first scientific study to investigate the general characteristics and investment behavior of HNWIs who pursue impact investing. HNWIs have great relevance for financial markets yet they are out of reach for most researchers. As a result, they are poorly understood, and apparently also often misunderstood, which has substantial economic and social implications that this paper helps mitigate.

Details

Qualitative Research in Financial Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1755-4179

Keywords

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Book part
Publication date: 1 October 2015

Anis Triki, Vicky Arnold and Steve G. Sutton

Research has shown evidence of the use of impression management strategies in corporate disclosures as a means of presumably tempering and swaying investors’ perceptions…

Abstract

Research has shown evidence of the use of impression management strategies in corporate disclosures as a means of presumably tempering and swaying investors’ perceptions. These impression management strategies include shifts in the tone used when providing disclosures. However, recent research also provides evidence that such techniques can have a contrary effect when the tone of the message appears to be “too good to be true.” This study explores how the use of optimism and certainty in the Management Discussion and Analysis (MD&A) portion of the annual report affects nonprofessional investors’ investment decisions – a class of investors known to heavily rely on the MD&A portion of annual reports. We theorize a bifurcated effect where optimism and certainty have a positive and direct effect on investor willingness to invest, but at the same time optimism and certainty have a negative indirect effect on willingness to invest that is mediated through decreased perceptions of disclosure credibility. The results provide evidence supporting such a bifurcated effect from the use of tone in management disclosures.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-78441-635-5

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Book part
Publication date: 21 May 2021

Tehmina Khan and Peterson K. Ozili

Purpose: Ethical investing is considered to be the pinnacle of embedding environmental considerations in investing. Environmental considerations form a major part of…

Abstract

Purpose: Ethical investing is considered to be the pinnacle of embedding environmental considerations in investing. Environmental considerations form a major part of corporate social responsibility (CSR), and CSR is considered to have a positive effect on investment returns. The purpose of this chapter is to assess the degree of environmental considerations embedded in faith-based funds investment criteria. The comparative analysis between principles and practice through faith-based investing is undertaken.

Design/Methodology: Prospectuses of selected faith-based mutual funds and other information around investment strategies provided on the Funds’ websites have been analyzed in detail. Content analysis has been undertaken in order to evaluate the existence and types of environmental related criteria demonstrated by the Funds. The criteria are compared to the faith principles on environmental responsibility.

Findings: It is generally assumed that CSR requirements form the premise of socially responsible investing. The authors find that faith-based investing criteria are narrowly defined and that they represent biases which do not promote environmentally responsible investing.

Implications: The major implication is that inspite of the availability of faith-based environmental responsibility principles, faith-based funds represent a case of economic returns prioritization over environmental considerations. Environment accountability principles that exist need to be promoted regularly so that they become an essential element of every day decision-making including faith-based economic decision-making.

Originality: This study contributes to the debate on ethical investing from the perspective of faith-based mutual funds.

Details

New Challenges for Future Sustainability and Wellbeing
Type: Book
ISBN: 978-1-80043-969-6

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Book part
Publication date: 7 July 2014

Harry Hummels and Marieke de Leede

This chapter sketches a new development in responsible investing, namely impact investing. Impact investing, which we define as the entire spectrum of investments

Abstract

Purpose

This chapter sketches a new development in responsible investing, namely impact investing. Impact investing, which we define as the entire spectrum of investments deliberately aiming to create shared value, can be seen as an integrative approach to wealth creation through investments. The case of microfinance is used to illustrate this new development.

Methodology/approach

The chapter combines a viewpoint and a case study that serves to illustrate the practical relevance of the viewpoint.

Findings

The chapter starts with a brief overview of the origin and rise of responsible investments, followed by a description of mission-related investments and impact investing as its latest development. Microfinance is presented as a special case, thereby focusing on the investors, the asset allocation and the meaning – and application – of the notion of impact.

Practical implications

The chapter shows that a focus on social and financial returns can be combined without having to make serious financial sacrifices. It also demonstrates that investments can come from investors as diverse as pension funds, foundations or high net-worth individuals.

Social implications

If impact investing really takes off – particularly supported by institutional money – there will be much more opportunity to tackle social and environmental innovation than without those investments.

Originality/value of chapter

The chapter challenges (institutional) investors to evaluate their responsible investment strategy and to rethink their asset allocation. Impact investing can become an important addition to the responsible investment landscape.

Details

Socially Responsible Investment in the 21st Century: Does it Make a Difference for Society?
Type: Book
ISBN: 978-1-78350-467-1

Keywords

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Book part
Publication date: 21 November 2018

Caroline O. Ford, Bradley E. Lail and Velina Popova

Earnings management is a common term in the academic community and is likely understood by managers and professional investors, but how the large community of…

Abstract

Earnings management is a common term in the academic community and is likely understood by managers and professional investors, but how the large community of non-professional investors interprets this term is less clear. We examine non-professional investors’ attitudes toward earnings management and their resulting investing behaviors using a 2 × 2 mixed design. We manipulate investor role (prospective vs current) between participants and the method of earnings management within participants. We believe that different investment goals (prevention vs promotion) between current and prospective investors should lead to different investing behaviors. Consistent with our expectations, we find that current investors are more likely to maintain an equity than prospective investors are to invest in the same opportunity. Further, the consistent link between investors’ attitudes and actual investment behavior is only present for prospective investors. The prevention goal drives the current investors to maintain their investment, while the prospective investors remain more objective and focus on a goal of promotion. Importantly, prior research examining investor attitude toward earnings management has failed to link investors’ attitudes with actual investing decisions; our study attempts to fill this void by examining attitudes toward earnings management as well as subsequent investment behavior.

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Abstract

Details

Developing Africa’s Financial Services
Type: Book
ISBN: 978-1-78714-186-5

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Book part
Publication date: 17 March 2017

Q. C. Quinn and Kamal A. Munir

Much of the current literature on category construction and maintenance has focused primarily on the disciplining effect of audiences that evaluate for conformity. This…

Abstract

Much of the current literature on category construction and maintenance has focused primarily on the disciplining effect of audiences that evaluate for conformity. This literature often characterizes categories as benign organizing devices that bring order to social life. However, categories are also contentious political and cultural productions. This is especially so, when the categories are hybrid. Employing a qualitative case study of an impact investing organization operating in Sub-Saharan Africa, we illustrate how the construction and maintenance of hybrid categories can have potentially advantageous effects for certain actors by shaping the architecture of knowledge and transferring legitimacy to otherwise illegitimate actors or nascent practices. The findings of this study highlight how some hybrid categories can be used to create and maintain unequal relations of power.

Details

From Categories to Categorization: Studies in Sociology, Organizations and Strategy at the Crossroads
Type: Book
ISBN: 978-1-78714-238-1

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Abstract

Details

The Savvy Investor's Guide to Avoiding Pitfalls, Frauds, and Scams
Type: Book
ISBN: 978-1-78973-559-8

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Abstract

Details

The Savvy Investor's Guide to Building Wealth through Alternative Investments
Type: Book
ISBN: 978-1-80117-135-9

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Abstract

Details

The Savvy Investor's Guide to Building Wealth Through Traditional Investments
Type: Book
ISBN: 978-1-83909-608-2

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