"People are attracted by the prospect of having a fixed-income piece in frontier economies, as well as by the demonstrated lack of correlation [with traditional asset classes] that microfinance has had over the past 10 years," Crawford said.
The Short Duration Fund's investment minimum is $500,000.
Sarona, which among other things manages private-equity funds-of-funds in frontier and emerging markets with a focus on companies in the small to mid markets, charges a "1 and 10" fee structure. These funds are limited to accredited investors.
Pries said Sarona invests in two types of companies-those that produce products and services that are inherently impactful (i.e., are engaged in such areas as health care, microfinance banks, affordable housing), and those that don't make things that are directly impactful but which are infused with progressive values at the core of their businesses. He noted that's manifested in how they treat their employees, or their policies toward women and minorities.
"We haven't yet figured out how to measure these things and report back to investors," Pries said. But he added his experience shows that companies that infuse these values into their corporate DNA typically do much better when it comes time to execute their exit strategies.
"The world is moving toward stronger values expectations within the business community," Pries said. "Companies at the forefront of that are getting premiums when they sell their businesses."
And for Sarona, that means higher returns on their portfolio companies. Pries said Sarona aims to build portfolios that exceed 20% internal rate of return on a gross basis.
But as Cordis noted, both MicroVest and Sarona's products are aimed at the high-net-worth investors. Going forward, the challenge for the impact investing industry is to develop products that are within reach of the mass affluent. In that vein, he said ImpactAssets plans to roll out impact-oriented debt products with $25,000 investing minimums, as well as products dealing with microfinance and other areas in the impact space.