Prudential has a long tradition of making investments that support and improve communities. The company established what is now Social Investments in 1976, and has since made more than $1.5 billion in impact investments. Impact investments go beyond traditional measures of economic return to include measurable social and environmental benefits.
Social Investments provides financing in a variety of forms to a diverse array of partners, including for-profits and nonprofits, to create powerful social impact. Additionally, Social Investments supports the growth of the impact investing industry and seeks to innovatively deploy capital to disadvantaged markets. Through its investments, it endeavors to develop models that can be replicated and expanded over time to attract additional capital to underserved communities.
Social Investments uses a wide range of investing tools, including unsecured loans, secured loans, investments in structured financings and real estate, direct equity and investments in limited partnerships. It provides capital at a variety of different points on the risk-return spectrum to leverage its impact.
Social Investments concentrates its work in domestic and international communities where Prudential has a significant business presence. It also strives to work closely with the communities in which it invests to understand local dynamics and key stakeholders.
To reach communities, Social Investments invests both directly and indirectly through trusted intermediaries, including community development financial institutions, mission-oriented investment funds and national partners.
Social Investments acts as an asset management group for Prudential and The Prudential Foundation. As of December 31, 2012, the Social Investments portfolio was $393 million. In 2012, Social Investments made $70 million in new investments. These investments are divided among two portfolios, which target slightly different types of investments:
- A large corporate portfolio for Prudential, which contains a breadth of investment types and has a greater emphasis on financial return
- A mission-focused portfolio for The Prudential Foundation
The two portfolios are managed on an “impact first” basis, which means all investments must have a meaningful social impact to be considered. In addition, all projects must be able to track and report social impact metrics in addition to conventional financial metrics and, where feasible, participate in third-party social impact assessments.