Impact Investing with Influence: Aligning Your Investments with Your Values as an Accredited Investor

In the evolving landscape of investment, the surge of retiring American legacy entrepreneurs presents a unique opportunity for accredited investors. This demographic shift, coupled with the growing interest in aligning investments with personal values, has spotlighted impact investing as a critical avenue for generating not only financial returns but also positive social and environmental impacts. Legacy Capital Fund emerges as a pivotal player in this space, offering a strategic pathway for investors to capitalize on undervalued small and medium sized businesses while fostering impactful change.

The Urgency of Impact Investing

Impact investing has gained significant traction, driven by the desire to address pressing global challenges while achieving financial returns. Portfolio managers emphasize the dual mandate of identifying companies driving positive impact alongside seeking outperformance. They believe companies focused on solving world issues are likely to deliver higher topline growth over time. This approach is underpinned by the United Nations Sustainable Development Goals (UN SDGs), serving as a guiding framework for investments.

• 480,000 Business Owners Retiring Annually:
  Approximately 480,000 American legacy business owners are expected to retire each year in the U.S. over the next 15 years, creating a significant market for business acquisitions.
  

• High Interest Rates Impact: The current high interest rates are causing a significant drop in selling multiples, making it increasingly a buyer's market for acquiring businesses.
  

• Private Equity Returns: Private equity historically offers higher returns, lower volatility, and less risk compared to public investment markets, and is uncorrelated with public markets.
  

• Impact of Climate Change on Investment: The UN estimates that USD 5–7 trillion in investment is required per year through 2030 to meet its Sustainable Development Goals (SDGs), highlighting the massive financial scale involved in addressing global challenges.
  

• Co-Investment Strategies: Impact investing funds often use co-investment strategies to mobilize more capital, with typical funds having at least four different types of investors including senior lenders, junior lenders, preferred investors, and common equity.
  

• Market Trends in Targeted Industries: The global technology market is estimated to grow at a compound annual growth rate (CAGR) of 8.1% from 2022 to 2032, and the global transportation market at a CAGR of 8.2% over the same period.
  

• Impact Investment Growth: In 2022, there was USD 1.5 trillion of green, social, and sustainability bond issuance, indicating a rapidly growing market for impact investments.
  

• Diversity of Impact Investors: The GIIN’s Annual Impact Investor Survey reported that nearly 75% of capital raised came from family offices or high-net-worth individuals (HNWIs), and more than 60% from foundations, showing the varied sources of impact investment capital.

According to the Global Impact Investing Network (GIIN), The following are typical types of investors that make investments into impact investing funds:

• Development Finance Institutions (DFIs): A development finance institution is a multilateral, bilateral, or quasi-government institution that invests in the private sector for development purposes.
  

• Foundations: Foundations are increasing their impact investing mandate and moving increasingly from pure philanthropy to Program-Related Investments (PRIs) or Mission-Related Investments (MRIs).
  

• Independent Investors: This group includes high-net-worth individuals (HNWI) and small family offices that manage investments for wealthy individuals or families.
  

• International Development Agencies: Aid agencies can be multilateral, bilateral, government, or quasi-government. Aid agencies are most often sources of grant capital but do occasionally provide investment.
  

• Institutional Investors: This group can include international banks with a social finance arm or wealth management functions, corporations, pension funds, and insurance companies.
  
  

Expert Analysis and Strategic Acquisitions

Legacy Capital Fund employs a rigorous 160-point Inspection process, including impact investing considerations, to evaluate potential acquisitions. This meticulous approach ensures that investments not only offer financial returns but also contribute positively to societal and environmental outcomes. The fund's strategy involves building internal teams, processes, and technology to enhance the existing business model, improve demand generation, and drive growth. This strategy has been successfully applied in past acquisitions, such as with Cisco’s Global Demand Generation business, leading to significant increases in leads and revenue.

A Call to Action for Accredited Investors

Private equity plays a crucial role in impact investing, offering higher returns, lower volatility, and less risk compared to public investment markets. Legacy Capital Fund's focus on sectors with promising market trends, such as the expected growth in the global technology and transportation markets, positions it to capitalize on these opportunities. The fund's targeted industries share similarities in being high-margin, easily scalable, and capable of being managed remotely, making them attractive investment opportunities.

The Legacy Capital Fund Approach

Legacy Capital Fund is uniquely positioned to leverage the current economic conditions and the influx of Boomer businesses entering the market. With an estimated 480,000 business owners looking to retire annually in the U.S. over the next 15 years, the market is ripe for acquisitions. Legacy Capital Fund focuses on web-based technology and transportation/logistics sectors, targeting businesses with underutilized sales and marketing technology and minimal advertising. Their investment thesis is rooted in addressing inequality and climate change, targeting the emerging low-income consumer segment with goods and services that mitigate carbon emissions and build resilience.

Wrap Up

As the investment landscape continues to evolve, the opportunity for accredited investors to make a meaningful impact while achieving financial returns has never been greater. Legacy Capital Fund offers a strategic avenue for investors to engage in impact investing, leveraging expert analysis and insights to navigate the complexities of business acquisitions. By focusing on undervalued Boomer businesses with potential for significant social and environmental impacts, Legacy Capital Fund not only aims to generate financial returns but also to contribute to a more sustainable and equitable future.