Impact investing is the practice of investing in for-profit companies, funds, or organizations with the intention to generate a measurable, positive social or environmental impact, as well as a financial return. Impact investing is based on the principle of using the power of capital for the greater good. Impact investing is rapidly growing worldwide, using a proactive approach to impact, as opposed to merely avoiding negative impacts. It has the ability to address a wide range of global issues: the climate crisis, accessible water and power, affordable housing, equitable labor practices, sustainable farming, clean energy, and much more.
As a holding company, we acquire and strategically invest in companies under our umbrella and, in exchange, we provide long-term financial and managerial support to these companies, or holdings. This serves several purposes. Financially, it supports the growth of the holdings in our portfolio, while encouraging CoPeace’s overall cash flow and more reliable yearly returns. Structurally, it protects from losses and fosters the continued success of CoPeace as a whole. Even more importantly, though, we view our holding company role and responsibility as a partnership with our holdings to create impact for the greater and further-reaching good. From an impact perspective, this model allows us to craft a portfolio of companies working towards complementary missions in any given social or environmental subsector, and ultimately to amplify our collective impact output.
The advantages of a holding company model are many. For new and growing companies, permanent capital is everything. We believe the holding company strategy is superior to a fund as it affords both a longer-term investment horizon and provides a natural way to ensure that mission remains durable in each enterprise. While the investment horizon of private equity is far better than the drive for quarterly numbers of a public company, the need for a liquidity event with private equity can conflict with planning much beyond the typical hold period of 5-7 years. Healthy enterprises often need to make smart business investment decisions that take time to pay off. The holding company model provides a shield against shorter-term thinking.The holding company model is time-tested and has been used by many successful and widely-recognized companies to date including, of course, Warren Buffet’s Berkshire Hathaway. CoPeace is the first to apply this model on a large scale to impact investing and mission-driven companies.
A Direct Public Offering (DPO) is a means for a company to offer an investment opportunity directly to the public and publicly advertise the offering. Investors are not required to be accredited (wealthy), and investment amounts can be significantly affordable, allowing a wide range of investors to participate. At CoPeace, we call this “democratizing the investment world,” as it debunks the traditional models where only high net worth individuals can invest directly in companies.
A DPO uses a similar model to crowdfunding, in that the offering is raising money from a large number of people, with each person contributing a relatively small amount. However, with a traditional crowdfunding platform, supporters are simply making donations. With a DPO, participants are actually investing with a potential for a financial return.
A DPO is similar to an initial public offering (IPO) in that equities are sold to investors. But unlike an IPO, a company uses a DPO to raise capital directly to consumers and without underwriting from an investment banking firm. This greatly increases access for potential investors from non-traditional, diverse backgrounds.
CoPeace seeks holdings that already have a strong and effective management team, with the intention to simply support and elevate that company’s performance. CoPeace provides a unique level of financial sophistication that develops optimal models through a series of qualitative and quantitative analyses. These include impact assessments, econometric forecasts, and industry-specific capital structure and growth strategies. CoPeace also brings extensive marketing and leadership backgrounds, as well as an extensive bench of high-quality executives, that will be available to the holdings, if those skill sets are warranted.
"Socially responsible" or "green" mutual funds and ETF's invest in selected companies doing some good things, but still negatively impacting society in other ways. In contrast, CoPeace invests directly in true impact companies whose sole mission is to positively impact social and environmental problems in tandem with generating profits.
