Louise Kooy-Henckel and Paul Skinner @ Wellington Management
Wellington Management’s impact investments include a financial services institution in Puerto Rico and a Spanish wind energy company, say Louise Kooy-Henckel and Paul Skinner
In our equity impact portfolio, we're looking to identify and invest in companies that are directly seeking to solve some of the big problems in society and the environment, as well as to deliver an attractive financial return. Our most recent addition has been one of the biggest financial institutions in Puerto Rico.
Puerto Rico is a poor country; it has been hurt by extended periods of economic recession, natural disasters and now Covid. Some 44% of the population is considered to be in poverty.1 So the recovery requires access to financial services to facilitate growth and to aid those specific parts of society.
The financial institution we have invested in is focused on very small businesses and subprime consumers.
Different opportunity set
Philosophically, the bond portfolio is aligned with the equity portfolio but has a different opportunity set. For example, within the securitised sector, we can address the issue of affordable housing by investing in agency mortgage-backed securities.
One opportunity that crossed from equity into fixed income was a Spanish wind energy company. Our impact equity team have been invested for some time, but the company came out with its first ever bond issuance recently, which we invested in.
Wellington's equity and fixed income impact investment teams collaborate closely, so we were already confident that this company was making a real difference.
(1) www.census.gov/quickfacts/PR, 2019
This post was funded by Wellington Management.
