Social Equity Investing: Righting Institutional Wrongs

From Cambridge Associates. Many institutional investors have long sought to promote social equity through grant making and other philanthropic endeavors. With the field of impact investing maturing, these institutions are now increasingly seeking investment solutions to accomplish the same goal. Yet this effort raises important questions: What is social equity investing? What does it look like in practice? And how do social equity investments fit in a portfolio?

In this paper the authors review the current state of social equity in the United States, highlight eight core social equity issue areas, and discuss the lessons we’ve learned in constructing portfolios with these investments. They define social equity investing as investments to promote equal opportunity and access for all, regardless of background, but they understand that many investors have different definitions. While investors need to be mindful of risks, the authors believe that investments can be made to promote a social equity impact agenda across the portfolio.