Community investment management has become an emerging career path for many young professionals today. With the growing interest in impact investing and social finance, there is increasing demand for talent who can lead community development initiatives and manage portfolios dedicated to positive social outcomes. However, navigating a career in community investment requires specialized expertise. This article will provide an overview of community investment as a concept, career paths available, and advice for developing the necessary skills and experience.
Two main career paths in community investing
There are two primary career paths in community investment management:
1. Community development banking and lending – This involves working for a community development financial institution (CDFI) that provides loans, investments and financial services to underserved communities. Entry-level positions include loan underwriting and portfolio management. More senior roles involve overseeing lending strategy across geographies and leading new product development.
2. Impact investing and social finance – This covers portfolio management roles focused on impact, either at specialized impact investing firms or impact programs within mainstream investment firms. Common positions include impact investing analyst/associate, ESG research analyst, and impact portfolio manager. The work involves impact due diligence, investment analysis, deal sourcing and portfolio monitoring.
Skills needed to advance in community investing
While community investing combines finance with social impact, it remains a specialized field. Some key skills needed to progress include:
– Financial analysis – Strong credit analysis, modeling, valuation skills
– Impact assessment – Ability to evaluate social/environmental impact and financial returns
– Regional expertise – In-depth knowledge of target geographies and sectors
– Relationship building – Forging partnerships with stakeholders in local communities
– Mission alignment – Commitment to economic and social justice
How to gain relevant experience
Entry-level applicants are not expected to have direct community investing experience. However, there are ways to develop relevant skills:
– Pursue finance internships at CDFIs and other specialized lenders
– Volunteer or work with economic empowerment nonprofits
– Take on analytical roles at social enterprises or impact-focused companies
– Attend impact investing training programs and conferences
– Perform research projects on community development finance
– Assist faculty on research related to impact investing or community development
– Follow industry publications and thought leaders to build knowledge
Tips for career success in community investing
Here are some key tips for achieving career success in community investment management:
– Build networks in the impact investing community through informational interviews and events
– Be able to articulate both the financial and social case for community investments
– Develop expertise in a specific geography or asset class
– Explore nontraditional educational experiences like practicums and fellowships
– Consider niche MBA programs that offer coursework in social finance
– Maintain flexibility – community investing spans both nonprofits and for-profits
– Align your personal values and interests with the social mission of community investing
Community investment management is an emerging career that allows young professionals to blend finance with meaningful social impact. By developing specialized skills in areas like impact analysis and community development, as well as actively networking and seeking mentors, new entrants can gain a foothold in this rapidly growing field.