Balancing Competing Concerns in a One-Pocket Portfolio

In pursuit of a consciously-constructed portfolio, each investment is scored according to its function. Like any investor, we weigh the merits of each investment carefully. Some of these characteristics may seem relatively familiar to traditional investors, such as risk and return profiles, liquidity options, and time horizon. But as a mission-driven investor, we also weigh other factors that traditional investors leave out, including how a company treats employees, manages waste, and impacts the communities in which it operates.

As a philanthropic investor, we sometimes choose to make investments for which we expect a below-market rate of return because we have a compelling mission-related reason for doing so (and we designate such investments as “program-related investments”). This is the very real extension of one-pocket portfolio.

When constructing our one-pocket portfolio we consider the following six components:

Mission

All enterprises, regardless of tax status, produce both social and financial results, on a spectrum from positive to negative, including neutral. Their financial and social performance is measurable and varies over time. The mandate of the organization to ensure it’s values are present throughout the portfolio means each investment decision must review the extent of mission fit present in the offering.

Financial

Financial performance is important. We believe we can identify appropriate, mission-aligned investments in every asset class that deliver the financial performance we need for a blended and consciously constructed portfolio.

Liquidity

Given our function as a private operating foundation, we are constantly balancing our portfolio to ensure we have proper liquidity to enable the ongoing work of the organization.

Risk

Managing portfolio risk is essential to successful long term performance. Each investment class carries a different risk profile and is considered as part of the total portfolio construction. Risk is not necessarily defined by financial risk, but also includes missional risk as well.

Network

As Access Ventures strives to change the way the world invests, an expanded network provides more opportunities for learning, collaboration, and influence. Additionally, the organization’s network provides expertise that may be leveraged in pursuit of its mission and a pipeline for new ideas and opportunities.

Experience

“Change is the only constant in life” (Heraclitus). We don’t always know the answer and we strive to posture ourselves in a way that allows for learning, and experimentation. We view growth as the pursuit of more and better ways to serve others and humility as the posture one should take in order to grow effectively. As a company, we are always pushing forward knowing that we don’t have a monopoly on good ideas and solutions.

As the graphic illustrates, Access Ventures makes strategic use of its direct investment portfolio as it provides the most direct form of impact investment. The selection process and ongoing relationship ensures our values are aligned and we are able to grow together as partners. For example, we have an investment into Hot Chicken Takeover which is built on a basic value of human dignity which manifests itself supportive employment practices. Over the years we have learned much from Joe DeLoss, the company’s founder, and the complexities facing his innovative human resources model.

We believe this conscious construction approach ensures our values are present in the portfolio while also maintaining an appropriate balance of management principals. As the market continues to present new and exciting investment opportunities we are confident our portfolio will reflect the organization’s purpose of existing.