Do Impact Investments Contribute to Portfolio Performance? A Preliminary Investigation 

Mario La Torre, Helen Chiappini, Fabiomassimo Mango (Sapienza University of Rome, Italy)

 Abstract: Social Impact Investments (SII) intentionally generates social impact and financial return. Portfolio diversification is one of the under-investigated areas in SII literature. The aim of this paper is to fill this gap by conducting a preliminary investigation of social impact firms (SIF) contribution to portfolio risk and performance. For the purpose of this paper, we use a sample of SIF members of the London Social Stock Exchange who are publically listed and two contrast samples with traditional firms (non-SIF). To carry out the analysis, we employed methodology based on Markowitz (1952a, 1952b) and Sharpe (1963). The paper may provide useful insights for asset managers and investors involved in portfolio choice evaluation and policy makers interested in fostering development of the social impact market. 

Key words: social impact investments; impact firms; portfolio performance; portfolio choice 

JEL codes: G15, G17