One of the biggest afterthoughts with impact investing is currency risk. Make an equity or debt investment in rupees, shillings or dongs and the risk of that currency depreciating could harm the overall effectiveness of the investment.
Impact investors expect to do well in terms of financial returns and to do social good.
Less money to beneficiaries means less effective value across the board; there is not as much money to perform nor to do the social good intended.
Enter MFX Solutions. It provides hedging in exotic currencies to facilitate impact investments. MFX is backed by the Omidyar Network, Calvert Foundation and other investors in the impact investing space. It uses Wall Street hedging tools to mitigate the risk of investing in some of the poorest, most volatile countries in the world.
MFX recently announced that it has surpassed hedging $500 million in loans.
This is a smart solution and a great service for any impact investor to consider. Check it out at mfxsolutions.com.
Currency Risk Solutions
March 12, 2014
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