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by  BlueBay Fixed Income teamM.Frye Oct 31, 2023

Watch time: 4 minutes 43 seconds

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Hello, and thank you for joining us. This is Georgina Tzanetos with Institutional Investor, and this is our fireside chat series where we discuss strategies and impact investing and liquidity management. I have with me today Mindy Frye, Institutional Portfolio Manager for Fixed Income at RBC. So Mindy, where are you currently seeing opportunities in the impact investing space today, and what are your investors ultimately looking for?

Thanks for having me. So, one of the things I think that has been really interesting is how much more mainstream impact investing has become. I think even 10 years ago, the concept wasn't very well known and maybe was considered a little off the beaten path. Coupled with that, you had the fact that many impact investing strategies were concessionary, so there wasn't necessarily a financial return there to be had. And so I've seen a lot that has changed, and I think the opportunities in the impact space have gotten wider and deeper.

As a result, we're really seeing a broad range of investors who are looking to align their money with their purpose or values. Investors now seem to recognize that they can earn a competitive financial return while also making that measurable, positive, social, or environmental impact within the community that they live in.

All of this has really culminated in increased popularity of the concept, along with additional investment opportunities. So generally speaking, I think there are opportunities across a variety of themes, but one area in particular that I've seen meaningful growth has been in the clean energy space. Part of that growth can be attributed to the Inflation Reduction Act, which included over two dozen different tax provisions that were really aimed at helping both families save money on energy bills, but also focused on accelerating the deployment of clean energy solutions, including electric vehicles and other climate change solutions.

But part of the growth has also been spurred by the numerous climate related disasters we've seen worldwide. I think no one has been immune to the massive wildfires, floods, hurricanes, and other weather-related tragedies we've seen in recent years. People are really being forced to take note of the impact of climate change, and I think the capital markets are going to have to be a part of the solution there.

In addition to the focus on climate change solutions, I've seen a significant uptick in interest from corporate investors who want to align their balance sheet assets with their firm's philosophy around diversity, equity, and inclusion goals. Investing in ways that address the racial wealth gap has really continued to garner interest across a variety of sectors, both public and private markets, and I think there's been great success there. One area in particular that is really ripe with opportunity is investing in affordable homeownership for low-income families. And, this can be done, like I said, in both private and public markets, but it's an area that's really critical to addressing the wealth gap as home ownership is the number one way that American families build wealth.

In addition to that, I think small business investments will continue to be popular. We saw the devastation that the Covid pandemic had on our small business community. Really, that brought to light how important small businesses are, not just to our economy, but also to the many, many families who rely on small business as their primary income. So those are just a few of the places that I've seen opportunities arising and continuing to grow.

Well, thank you very much Mindy, and thank you all for joining us. Today's conversation was part of a series of interviews with Mindy Frye, so make sure to stay tuned for our next installment. Thanks for watching.


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