A new generation of socially conscious investors, comprising predominantly millennials, is driving a prolific trend in global investing. They want their money to do good in the world, while still realising a fair return.
The trend, known as impact investing, has gained significant traction in first-world markets. By investing in businesses that benefit society or the environment, be it through renewable energy, sustainable farming, infrastructure development or healthcare, impact investors aim to have a real-world impact. Their mantra is to create a positive future for more than just themselves.
Conventionally, impact investing means only purchasing shares in companies that do good, but South Africa’s leading independent financial services provider, Fedgroup, believes that investing directly into sustainable ventures, instead of on a stock exchange, is a smarter alternative.
That’s because investing in shares and funds can be unnecessarily complex, and hidden costs and fees eat into your returns. In addition, barriers to entry can be prohibitive. Instead, Fedgroup has created a mobile app that allows impact investors to own farming assets through a quick, streamlined process.
Fedgroup’s Impact Farming investment platform offers investors access to a growing network of local crowd-farming ventures that generate solid profits to deliver competitive returns. From as little as R300, investors can own assets from accredited farming partners, including blueberries, sustainable honey and urban solar farms.
Impact investors purchase the individual blueberry bushes, beehives and solar panels through the app. These assets, along with all the others purchased on the app, are installed on an approved site to form a venture network that is managed by farming experts, who take care of the rest.
Fedgroup has contracts in place with partners to ensure that all the honey, blueberries and energy generated by these assets are purchased as they are produced. The owners of the assets then earn a regular income from the sale of these products.
This money can then be enjoyed as passive income, or reinvested to benefit from compounded growth. Impact Farming assets also qualify for a tax benefit associated with renewable energy and sustainable farming.
Not only does this model significantly lower the barriers to entry inherent in traditional fund investing, but it also allows socially-conscious investors to make an impact with their money, regardless of the amount invested.
And there’s also less risk compared to various traditional investments thanks to the innovative approach. Extensive due diligence is performed on every product line to ensure its viability before it is brought to market. The company then carefully vets and selects Impact Farming ventures for both the financial impact they have on investor wealth creation, and the positive impact they have on the world.
The assets are also insured, the cost of which is included in the purchase price. Therefore, if an investor’s asset is ever destroyed in a natural disaster, Fedgroup replaces it.