Impact Investing Resources
The resources contained in this section have been researched and written by third-parties. EMPEA provides access to third-party reports that we believe may be valuable to our site visitors as well as additional resources related to impact investing. However, EMPEA accepts no responsibility for the accuracy or the completeness of the material. For questions and confirmation of the information provided, please contact the originating company. The views in these reports are of the authors and do not necessarily represent the views of EMPEA.
How Private Equity Models and Practitioners Can Advance Impact Investing in Emerging Markets
Dec 2014 | Source: EMPEA Impact Investing Council
Recognizing the growing importance of impact investing, EMPEA established an Impact Investing Council in 2013 to play a role in professionalizing and scaling the industry, focusing specifically on market-based solutions to major global social and environmental challenges. In early 2014, several firms seated on the Council provided insight on how private equity models and practitioners can advance impact investing in emerging markets.
Contributors:
· Patricia Dinneen, Chair of EMPEA Impact Investing Council
· Arun Gore, President and CEO, Gray Ghost Ventures
· Renana Shvartzvald, Head of ESG & Impact, Vital Capital Fund
· Yasemin Saltuk, J.P. Morgan Social Finance
· Vineet Rai, Founder and CEO, Aavishkaar
· Jim Roth, Co-founder and Partner, LeapFrog Investments
· Marcus Regueira, Founding Partner and CIO, FIR Capital
· Joan Trant, Director of Marketing and Impact, TriLinc Global
The article appeared as a chapter in the book Responsible Investment Banking published by Springer International.
Impact Investing Policy In 2014: A Snapshot of Global Activity
Impact Investing Policy in 2014: A Snapshot of Global Activity is a result of the research, convenings, and partnerships we have developed over the last five years. The authors in the report – drawn from the IIPC network – examine the role of public policy in growing and shaping impact investing activity in various contexts. In this report, the IIPC provides brief summaries of policy innovation across themes, sectors and countries, broadening the conversation from what public policy could enable, to what public policy is actively addressing in so many different countries and markets.
Impact Investing: A Primer for Family Offices
Impact investing enables high net worth individuals to be explicit about their shared values and to reflect them in their investment and wealth management decisions. In addition, an impact investing strategy aligned with family values can help to engage a younger generation in the leadership and management of a family office. Family offices act as responsible stewards of the wealth of high-net-worth and ultra-high-net-worth individuals, their families and their heirs. Yet after wealth is generated by one generation of a family, an estimated 60% lose that wealth by the end of second generation, and a staggering 90% by the end of third. Many multi-generational family offices are now exploring whether impact investing is a way to unite families around values and positive legacies, thereby more closely involving family members in responsible long-term investing.
Funding for Results: A Review of Government Outcomes-Based Agreements
Funding for Results examines five case studies from around the world that illustrate the variety of policy and design opportunities available for outcomes-based agreements.
Investing in Conservation: A landscape assessment of an emerging market
A new first-ever survey of conservation impact investing reveals a market of approximately $23 billion across just the last five years, and finds that investments in this space are expected to more than triple over the next five years (2014-2018). However, the report also finds that a substantial amount of potential private capital has not been deployed, demonstrating a need for a significant increase in the number of risk-adjusted investment opportunities. Impact investment is one way to address the critical global deficit in conservation funding. It has been estimated that about $300 billion is needed annually to meet the world’s conservation challenges, yet, current levels of investment, mainly from governments, multilateral agencies and philanthropic sources, total only about $50 billion.
Impact Investment: The Invisible Heart of Markets
The world is on the brink of a revolution in how we solve society’s toughest problems. The force driving this revolution is “impact investing”, which harnesses entrepreneurship, innovation and capital to power social progress. This report examines what is needed to catalyse the growth of a global market for impact investment. It makes recommendations that can be implemented across Taskforce countries and beyond to deliver better social outcomes and improve millions of lives across the world. The crash of 2008 highlighted the need for a renewed effort to ensure that finance helps build a healthy society rather than endanger it. This requires a paradigm shift in capital market thinking, from two-dimensions to three. By bringing a third dimension, impact, to the traditional capital market priorities of risk and return, impact investing has the potential to transform our ability to build a better society for all.
Charting the Course: How Mainstream Investors Can Design Visionary and Pragmatic Impact Investing Strategies
While impact investing has entered the mainstream mindset, it has not become part of the strategy, operations and business culture of mainstream investment institutions. For most investors, impact investing still needs to be translated from a compelling concept into sound strategies. This report seeks to address this need by helping investors craft their impact investing strategy.
From Ideas to Practice, Pilots to Strategy II
From Ideas to Practice, Pilots to Strategy II is the second publication in the report series. In it are eight articles what are meant to expand on the topics covered in the first edition. This publication includes information on innovative products that have been designed to engage retail investors as well as frameworks to build an impact investing strategy for asset managers. It also looks at the role academic institutions can play in building the field of impact investing.
Finance for Resilence: Engaging Impact Investors and the Private Sector
This report argues that social impact finance can help address failures within the traditional private-sector development industry while fostering greater collaboration and scale. According to the report, impact finance, in which private sector groups help to finance solutions for vulnerable communities, can bolster the resilience of communities that are exposed to climate-related shocks, food shortages, accelerating urbanization, and conflict. The report’s authors further argue that public institutions, humanitarian and development agencies, and the private sector, working together, can help build resilience in such communities by addressing the lack of savings and resources, providing risk mitigation tools, and supporting better functioning domestic capital markets.
Private Capital, Public Good: How Smart Federal Policy Can Galvanize Impact Investing – and Why It’s Urgent
This report provides a framework for federal policy action in support of impact investing. Simply put, impact investing generates measurable, beneficial social or environmental impacts alongside financial returns. The proposals in this report—some near-term and concrete, others longer-term and more ambitious—have the power to unlock dramatic economic activity and immense positive impact. Ultimately, they may serve as a catalyst to help change the way investors think about long-term risks and returns.
Achieving social impact at scale: case studies of seven pioneering co-mingling social investment funds
This report aims to open up more information about developments in social investment by showcasing new fund structures: ‘co-mingling’ social investment funds. These are structures that foundations around the world are using to enable them to leverage their experience and assets to bring new skills, expertise and finance from more commercial investors into delivering social impact. In many cases, co-mingling funds enable foundations to achieve impact at a scale that cannot be achieved with their philanthropic capital alone.
Spotlight on the Market: The Impact Investor Survey
The report reveals market growth amidst greater government support, new product and fund launches, and widespread impact measurement. For the first time, the survey provides detailed insight into asset allocation trends across regions, sectors, and financial instruments from the largest-ever respondent group, up 26% this year from 2013.
Beyond the Pioneer: Getting Inclusive Industries to Scale
Social impact finance can help address failures within the traditional private-sector development industry while fostering greater collaboration and scale, a report from Total Impact Advisors and the Rockefeller Foundation argues. According to the report, impact finance, in which private sector groups help to finance solutions for vulnerable communities, can bolster the resilience of communities that are exposed to climate-related shocks, food shortages, accelerating urbanization, and conflict. The report’s authors further argue that public institutions, humanitarian and development agencies, and the private sector, working together, can help build resilience in such communities by addressing the lack of savings and resources, providing risk mitigation tools, and supporting better functioning domestic capital markets.
Driving integrated financial and social returns
This report, a collaboration between EY and LeapFrog Investments, examines how measurement can be used to drive integrated financial and social performance. The report explores the compelling case study of LeapFrog Investments, a Profit with Purpose investor in companies that provide financial services to emerging consumers in Africa and Asia. While the insurance sector is used as a powerful example of how companies can drive both profit and purpose, the study reveals important implications for implementing an integrated performance management framework more broadly.
Impact Investing: Driven by Profits, Values
Privcap presents a Special Report on impact investing – a 30-page deep dive into the emergence of a new form of capitalism that is being embraced by more and more in the private capital industry. The report includes interviews with veterans of impact capital, best-practices for reporting, case studies in profitable impact investments, and more.
Evolution of an Impact Portfolio: From Implementation to Results
Sonen Capital, in collaboration with the KL Felicitas Foundation (KLF) report, recently launched a report titled Evolution of an Impact Portfolio: From Implementation to Results that demonstrates to investors that impact investments can compete with, and at times outperform, traditional asset allocation strategies while pursuing meaningful and measurable social and environmental impact results.
From the Margins to the Mainstream – Assessment of the Impact Investment Sector and Opportunities to Engage Mainstream Investors
This report is a result of engaging over 150 mainstream investors, business executives, philanthropic leaders and policy-makers through interviews, workshops and conference calls. The overall objective of the Mainstreaming Impact Investing initiative is to provide an initial assessment of the sector and identify the factors constraining the acceleration of capital into the field of impact investing.
Working Paper – Growth and Opportunity: The Landscape of Organizations that Support Small and Growing Businesses in the Developing World
This paper discuss challenges that confront the intermediaries (e.g., investors, accelerators, donors, capacity-development providers, researchers, consultants, etc.) that are trying to support small and growing businesses (SGBs). This is important because the number and variety of investors and capacity development providers and development organizations, i.e., SGB intermediaries, has grown considerably over the last several years.
EMPEA Webcast: Market Based Solutions for Impact Investing
To learn more about impact investing, join EMPEA’s panel of experienced investors from Accion, J.P. Morgan, Leapfrog Investments, Siguler Guff and TriLinc Global as we discuss how impact investing grows sustainable, scalable businesses that generate attractive financial returns, while creating social and environmental benefits for local communities. This webcast explores the motivations behind impact investing, and the current and future prospects for this unique asset class.
VIDEO: Profit with Purpose
There are profits to be made by investing in companies that serve the needs of some two billion consumers coming into the middle class in emerging markets, says Dr. Andrew Kuper, Founder & President of LeapFrog Investments, who argues that his firm’s “Profit with Purpose” investment strategy in insurance and related financial services can change lives as well as deliver returns.
Impact investing and beyond: mapping support to social enterprises in emerging markets
With support from the Shell Foundation, ODI undertook a study to see if it was both feasible and useful to compile data on the range of support to social enterprises in emerging markets. The study revealed three main findings: (1) it is possible to collect and present useful information on support to social enterprises in emerging markets, (2) from our small pilot survey we identified over US$500 million in direct and indirect support to social enterprises, and (3) stakeholders would value the development of a regular survey to capture the full range of support.
Impact investment: An emerging asset class
Social impact investing is now high on the agenda for some of the world’s most powerful countries – and its transformational potential in developing markets is also becoming increasingly apparent.
Engines of Prosperity: Impact Report 2012
ANDE’s 2012 report on small and growing businesses (SGB) focuses on three “action areas” for the SGB sector: hurdles for female entrepreneurs; the finance gap for start-ups; and the difficulties faced by small holder agricultural businesses when attempting to enter the global market. In addition, the report includes a comprehensive review of ANDE’s work in 2012. – See more at: http://srv/app/gpca/htdocs/web.aspeninstitute.org/publications/ande-2012-impact-report#sthash.wvGLezSj.dpuf
A Practical Guide to Measuring and Managing Impact
The Practical Guide is a comprehensive resource that distills best practice in impact measurement into five easy-to-understand steps and provides practical tips and recommendations for how to implement impact measurement at the level of the social investor and in the social sector organisations that they support.
VIDEO: The Facts and Fiction of Impact Investing
Over the past decade, impact investing has come a long way as a concept and as an asset class. However, the field is at a critical juncture as it moves to scale this market. There are various theories of change about how to get more early-stage capital off the sidelines and differences in how organizations define impact. This panel will have a frank, provocative discussion exploring the true realities on the ground as well as whether and when there are real trade-offs between social and financial returns. – See more at: http://philanthropyforum.org/sessions/the-facts-and-fictions-of-impact-investing/#sthash.OPZfvama.dpuf
Perspectives on Progress: The Impact Investor Survey
The report reveals the experiences, expectations, and perceptions of 99 impact investors in 2012, as well as their plans for 2013. Investors surveyed for the report include fund managers, development finance institutions, foundations, diversified financial institutions, and other investors with at least USD 10 million committed to impact investment.
Navigating the Landscape of Impact Investing
The goal of this presentation is to provide a framework for thinking about impact investing and hopefully, some useful information about products and ideas.
Connecting Impact Investing to Significant Capital
This presentation suggests addressing the issue of connecting capital to impact investing in three steps: 1)Understand the landscape and then choose a Market; 2)Understand how and why products are “bought” in the unique channel you are pursuing, including the trends that will influence FUTURE behavior; and 3)Position for success and “sell”.
A Portfolio Approach to Impact Investment: A Practical Guide to Building, Analyzing and Managing a Portfolio of Impact Investments
This research presents a portfolio management tool to analyze impact investments across the three dimensions that determine the performance of these assets: impact, return and risk. The work responds to an increasing demand for portfolio management strategies from both new and experienced impact asset managers, as market opportunities and portfolios grow.
From Blue Print to Scale: The Case for Philanthropy in Impact Investing
This research paints a clear picture: impact capital alone will not unlock the potential of impact investing for the global poor. Because of the extreme challenges facing those who are pioneering new models for inclusive business, truly realizing the impact in impact investing will require more, not less, philanthropy, and will need that philanthropic support to be delivered in new ways.
Insight into the Impact Investment Market: An in-depth analysis of investor perspectives and over 2,200 transactions
This year, the GIIN and J.P. Morgan have partnered on an expanded survey, capturing data on over 2,200 private transactions totaling over USD 4bn of investment. In complement to this investment survey, we also surveyed investor views on investment philosophy and the overall development of the sector. The 2011 survey returned data from a broader and more geographically diverse pool of respondents. The questions explore returns, risk and impact measurement practices in more depth and also gauge general market perceptions.
Counter(Imp)acting Austerity: The global trend of government support for impact investment
Impact investments – those intended to create positive social or environmental impact alongside financial return – channel capital into impactful businesses, which are poised to partner with government in social service delivery. In a global trend, governments are increasingly turning to domestic impact investment as they balance the need for fiscal consolidation with the demand for investment in economies struggling to grow. In order to leverage their funding, governments are developing public-private partnerships to encourage private-sector investment alongside their own and pursuing outcomes-based procurement with impact businesses in mind. We evidence this global trend by surveying the programs governments have put in place to support impact investments, and consider some of the benefits and challenges they face in doing so.
Impact Investing: Happy Returns
“BACKING someone to live,” is how Leapfrog Investment’s first deal is described by Jim Roth, the co-founder of the “profit with purpose” private-equity firm. That was two years ago, a $6.7m stake in AllLife, a South African firm that provides life insurance to people with AIDS and infected with HIV, subject only to the condition that they submit to regular blood tests to prove they are taking their life-saving anti-retroviral drugs.
Impact Investing: Transforming How We Make Money While Making a Difference
This is the first book to chart the catalytic path of this new industry, explaining how it is and can be a positive disruptive force. It shows how impact investing is a transformational vehicle for delivering “blended value” throughout the investment spectrum, giving a single name to a set of activities previously siloed in enclaves, revealing how they are linked within what is becoming a new field of investing. Written by two leaders in the growing field of impact investing, the book defines this emerging industry for participants on all sides of the funding equation (investors, funders and social entrepreneurs).
Promise and Progress: Market-based Solutions to Poverty in Africa
Promise and Progress extends and deepens research into Market-based solutions (MBSs), culminating a 16-month Monitor study of MBSs in sub-Saharan Africa (SSA). This investigation is particularly important because the poverty challenge in SSA is enormous. Despite the obstacles, MBSs are proliferating in Africa.
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty
POOR ECONOMICS argues that so much of anti-poverty policy has failed over the years because of an inadequate understanding of poverty. The battle against poverty can be won, but it will take patience, careful thinking and a willingness to learn from evidence. Banerjee and Duflo are practical visionaries whose meticulous workoffers transformative potential for poor people anywhere, and is a vital guide to policy makers, philanthropists, activists and anyone else who cares about building a world without poverty.
Impact Investment: An Emerging Asset Class
In a world where government resources and charitable donations are insufficient to address the world’s social problems, impact investing offers a new alternative for channeling large-scale private capital for social benefit. With increasing numbers of investors rejecting the notion that they face a binary choice between investing for maximum risk-adjusted returns or donating for social purpose, the impact investment market is now at a significant turning point as it enters the mainstream. In this work, we argue that impact investments are emerging as an alternative asset class.
Emerging Markets, Emerging Models
This report investigates “market-based solutions” as a means to help those residing at the base of the global income pyramid. The report is based on Monitor’s extensive research into hundreds of market-based solutions around the world, with a particular focus on India, which is an advanced laboratory of approaches and an especially fertile source of lessons about performance.
The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid
Discussions of base of the economic pyramid (BOP) markets have, until now, relied principally on business case studies and rough estimates of market size. The Next 4 Billion uses previously unreleased data to measure market opportunity at the BOP.
The Fortune at the Bottom of the Pyramid
Low-income markets present a prodigious opportunity for the world’s wealthiest companies – to seek their fortunes and bring prosperity to the aspiring poor.