New Simulation Exercise by Root Capital

Understanding the efficient impact frontier

New Simulation Exercise by Root Capital

Root Capital has created a participatory exercise that gives practitioners an opportunity to construct a portfolio based on real data about the five IMP dimensions of impact, as well as the expected financial risks and returns, of 200 actual Root Capital loans.

The tool enables participants to learn how to calculate whether a portfolio falls on the ‘efficient impact frontier‘, meaning that the portfolio offers the greatest possible expected impact relative to its expected risk-adjusted financial return.

At the end of the exercise, participants will leave with an understanding of how investors can build a quantitative approach to managing the financial risk and return of their investment portfolios in a way that is fully integrated with impact risk and return considerations.

Click here to learn more about Root Capital’s exercise.