Royally-Approved Investing That Amplifies Your Philanthropic Efforts

According to a recent magazine article, The Monarchy of Liechtenstein are officially impact investors — directing capital to businesses solving the world’s major social challenges alongside financial return. Prince Max von und zu Liechtenstein, the second son of the ruling prince Hans-Adam II, shared the good news via video chat from his family home in Schaan.

According to a recent magazine article, The Monarchy of Liechtenstein are officially impact investors — directing capital to businesses solving the world’s major social challenges alongside financial returnPrince Max von und zu Liechtenstein, the second son of the ruling prince Hans-Adam II, shared the good news via video chat from his family home in Schaan.

The 52-year-old Royal and former investment banker says, “There is no jurisdiction in this world which isn’t doing [impact investing],” “we are talking about a megatrend.”

Prince Max says that, so far, he has invested in more than 60 impact companies. Prince Max says Liechtenstein “has put sustainability very much into its core strategic objective”.

Impact investing may be the most heart-centered of all the sustainable investing strategies. I see it as a part of my philanthropic activities. Impact businesses need access to capital, to develop and scale innovative new technologies that are essential to meet the challenges we face to the environment and within society.

Through my own investment banking experience, I started working on a special project with Impact and Invest Ltd. Impact and Invest Ltd promote a unique portfolio of investments that make a positive difference to the world we live in and benefit society. 

This sustainable style of investing puts your money to work for good.

Working with financial advisors, wealth managers and global distributors, they focus on Impact investments from organisations that make a direct and positive social or environmental impact.

They also provide educational content on the benefits of social and environmental investment as well as providing information on the positive impact these investments make.

All investments on the platform are linked to UN Sustainable Development Goals. All investments published on the platform undergo a rigorous due diligence process assessing both the financial and ethical nature of the investments.

They are all commercial opportunities that can amplify your philanthropic goals with expectations of profits and the potential for you, as an, investor to share in the financial upsides through debt, fund, bond or equity offerings.

The Impact Investments fall under the following categories:

  • Environmental sustainability – with a focus on reducing climate change, resource management, waste recycling, de-pollution, clean energy, sustainable agriculture and wildlife conservation.
  • Social responsibility – with a focus on welfare and social care; wellbeing and mental health; empowerment and opportunity; and community integration and cohesion.
  • Medical technology – with a focus on MedTech in late stage trials or commercialisation which will have a disruptive positive impact on the patient’s experience during or after a serious condition or on how conditions are treated.
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How Can Impact Investing Amplify Your Philanthropic Goals?

From The Philanthropic Initiative’s helpful workbook:

  • “You can deploy more resources to social change. Instead of making gifts or grants that are a small percentage of your assets (foundations typically grant just 5% of their philanthropic assets), you may invest some or all of the remaining assets for social benefit. Moreover, these funds can be recycled and reused as the financial capital is returned.
  • “You can expand your portfolio of tools for social good. While philanthropy can be an effective way to pilot a program or innovation, philanthropy is not big or powerful enough to solve most social problems alone. Impact investing uses the power of the marketplace to achieve scale, and more financially sustainable solutions.
  • “You can get leverage. Philanthropic donations or concessionary capital may help an enterprise build capacity and/or de-risk the investment so that it is attractive to the enormous reservoir of market-based capital. “Blended investments” are those that are underwritten by a range of capital, including philanthropic, concessionary, and market rate.
  • “You can bring integrity to your investments. You can have the satisfaction that comes from aligning your investments with your values and social goals as well as ensuring they do not undermine them.”

Save on income, inheritance and capital gains tax bills

These UK tax-efficient investments available for UK investors.

Seed Enterprise Investment Scheme (SEIS)

The Government put in place to encourage investment into UK early-stage businesses. It works by providing tax advantages to sophisticated investors who invest in these companies.

Some of the key benefits include:

  • Income tax relief of up to 50% on your initial investment (max £100,000), exemption from capital gains tax on any gains from selling your shares.
  • Further income tax relief at the top rate of income tax for any losses made on the disposal of shares.
  • Unlimited deferral of capital gains if they are reinvested into an EIS/SEIS.
  • Exempt from Inheritance Tax if they are held for more than 2 years.

Enterprise Investment Scheme (EIS)

The structure is similar to SEIS, except the maximum investment is £1m, and the income tax relief is 30%.

Below you’ll find two EIS working examples based upon investing £100,000 into an EIS investment. The examples illustrate different scenarios dependent on having Capital Gains to defer. 

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In this example, the investor has realised a gain of £100,000 used to invest into the EIS qualifying company.

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Venture capital trusts

A certain amount of money into the VCT and can claim that amount back on your tax bill at 30%. This means that if you invest £20,000 in a VCT, you’ll get £6,000 of that back that you can offset against your tax.

This will only work up to the amount you have paid in tax to start with, so if one has only paid tax of £6,000 that year, you cannot claim more than £6,000 through SEIS, EIS and VCT.

These wrappers are not offered but may invest via the platform:

  • Work place Pension
  • SIPP (Self – Invested Personal Pension)

Want To Invest with Impact?

The Impact and Invest platform is regulated in the UK by the FCA and is reserved for High Net Worth and Sophisticated Investors, and investment professionals. Here is a demonstration.

click here to sign up to the platform. Who doesn’t want to make money whilst making a positive difference to the world around us or the society we live in. This is not financial advice.

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