Asset classes and products
Introduction
How to use these resources
Resources in this module
Glossary of terms
We have put together a glossary of terms for impact investing
Filter resources by level:
Overview
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Social Impact Investment
OECD
Reading time: 20 minutes
This section considers the main asset classes that are represented in the assets under management within impact investment. The text includes case studies and a consideration of the returns for each asset class compared to when they are invested in ‘traditional’ markets. A range of innovative financing mechanisms is explored, including an in-depth evaluation of social impact bonds (SIBs) and the potential challenges associated with them.
What the reviewer found helpful:“Illustrative diagrams and case studies helped bring to life innovative and complex financing tools seen in the impact investing market.”
Yinni Hu
Intermediate
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GIIN Annual Impact Investor Survey 2020 – pp. 35-38
Global Impact Investing Network
Reading time: 5 minutes
The GIIN’s 2020 Annual Impact Investor Survey details the investment activity of 294 leading impact investors, collectively managing USD 404 billion, over 2019 and forecasted into 2020. This section includes trend analysis of social issue areas within the impact ecosystem. Survey respondents have allocated a larger proportion of funds towards the Water, Sanitation and Hygiene (WASH) sector.
What the reviewer found helpful:“The GIIN presents an interesting breakdown of the changes in sector allocations”
– Serena Grover
Intermediate
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Growing Impact: New Insights into the Practice of Impact Investing 2020 – Chapter 1, pp. 1-13
International Finance Corporation
Reading time: 45 minutes
Provides an overview of the impact investment market by identifying segments of the market that have the potential to fulfil 3 key attributes associated with impact investment: intent, contribution and measurement. Provides insights on the size of the market with specific analysis exploring the market size in private markets and public markets
What the reviewer found helpful:“Examining the size of the impact investment market from a private market and public market perspective.”
Kate Munuka
Introductory
Debt, equity and hybrid models
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Impact Investment in Private Equity and Venture Capital
British Private Equity and Venture Capital Association
Reading time: 3 minutes
This page highlights the role of private equity and venture capital managers in driving change through their work. It considers key incentives for managers to get more actively involved in the field of impact investing and describes the adoption curve of managing for impact, illustrating the trend whereby impact investing is becoming increasingly mainstream.
What the reviewer found helpful:“A short but effective pitch to managers who are just beginning to think about incorporating impact into their investment decisions”
Yinni Hu
Introductory
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The Financial Performance of Impact Investing Through Private Debt
Global Impact Investing Network
Reading time: 40 minutes
The GIIN and Symbiotics give an overview of the aggregate performance of 50 Private Debt Impact Funds (PDIFs) and over 100 Community Development Loans (CDLFs). Both of these types of debt funds are analysed separately due to differences in the legal environments and financing constraints. The report indicates that generally, there are stable returns across various private debt risk-return strategies, sectors, impact issues and geographic locations.
What the reviewer found helpful:“The analysis on private debt impact funds is particularly interesting, with promising total asset growth figures”
Serena Grover
Advanced
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Private Equity Embraces Impact
KPMG
Reading time: 30 minutes
Provides an overview of the private equity asset class’ experience (challenges, opportunities, evolution of the market and investor relations) in the impact investment space Provides insight on how certain initiatives, such as the IFC Operating Principles for Impact Management, support and bring clarity around best practice, as well as additional understanding around what impact really means.
What the reviewer found helpful:“Multifaceted views on how the private equity funds have interacted with and embraced impact in transactions and the impact ecosystem as a whole.”
Kate Munuka
Intermediate
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Venture Capital and Impact Investing
Cambridge Associates
Reading time: 3 minutes
A brief paper highlighting the growing overlap between venture capital and impact investing, and the opportunities this trend presents. The paper raises the question of whether this convergence represents the future of investing as impact becomes increasingly integrated into mainstream investing strategies and decisions.
What the reviewer found helpful:“A one-pager that raises increasingly relevant questions about the blurring distinction between ‘traditional’ and impact investing.”
Yinni Hu
Intermediate
✔ Recommended
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Venture Capital and Impact Investing: Changing the World One Idea at a Time
Impact Investing Institute
Reading time: 1 hour (Webinar)
This webinar addresses questions Venture capital and impact investing intersect in their objective to bring new capital to enterprises looking to solve meaningful problems. Why does it seem so difficult to get capital to startup enterprises, especially when the founders are women, black, Asian or minority ethnic? And why do the larger pools of capital, especially institutional investors, find it hard to focus on some of the most exciting, potentially world-changing enterprises out there? Our Lead Expert Jamie Broderick discussed these questions and many more with our panellists Gary Stewart, CEO and Co-founder at The Nest, Chris Wiles, Senior Investment Manager at Foresight Group and Jean de Fougerolles, Managing Partner at Ascension Ventures.
Introductory
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Impact Investing Through Sterling Denominated Listed Fixed Income
Triodos
Reading time: 5 minutes
Triodos outlines its fixed-income strategy by discussing its approach to impact investing within the UK bond market. The resource explores their thematic approach, which seeks to build fixed income portfolios of companies, issues and projects that actively address seven key issues areas. The types of bonds used by Triodos are clearly highlighted, along with case study examples of companies that are committed to this fixed-income strategy.
What the reviewer found helpful:“Interesting to read about the banks and real estate companies that are already involved with impact investing in the UK bond market”
Serena Grover
Advanced
Blended finance
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Blended Finance: A Brief Introduction
Investing for Good
Reading time: 30-45 minutes
Explains what Blended Finance entails, how transactions are structured and the types of investors who tend to participate in blended finance structures. Provides examples of blended finance transactions
What the reviewer found helpful:“Outline of the key elements in a blended finance structure”
Kate Munuka
Introductory
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A Resource for Structuring Blended Finance Vehicles
Global Impact Investing Network
Reading time: 30 minutes
A comprehensive guide setting out different catalytic tools to consider for stakeholders who have decided on a blended finance approach for raising capital. The paper considers 5 catalytic tools that can be leveraged in blended finance structures considers their respective characteristics in turn. The paper provides key considerations and questions for stakeholders with regards to each tool, providing a framework through which stakeholders can increase awareness of each other’s motivations, identify common ground and/or areas of conflict, and better communicate and manage expectations. The paper includes an overview of a wide range of examples, as well as corresponding links to detailed case studies.
What the reviewer found helpful:“A practical and user-friendly guide, targeted at stakeholders to help them tackle the challenges of using blended finance structures.”
Yinni Hu
Advanced
✔ Recommended
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Making Blended Finance Work for the SDGs
OECD
Reading time: 30 minutes
The OECD outlines why blended finance – an approach of combining different forms of capital towards development – is a key solution to close the financing gap towards the SDGs. The report explores the unintended consequences that may arise from scaling up blended finance without a sufficient understanding of its risks. Best practices are also highlighted to display lessons learned from blending approaches, tracking and data, and monitoring and evaluation.
What the reviewer found helpful:“A clear explanation of what blended finance is and how it can be used to scale SDG funding”
Serena Grover
Intermediate
Investing in public and private markets in terms of risk and impact intensity
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Investor Contribution in Public and Private Markets
Impact Management Project
Reading time: 20 minutes
This paper explores the concept of ‘investor contribution’ – the value-add contribution that individual investors make to enable enterprises they invest in to achieve impact. The paper is a detailed overview of the IMP consensus on the topic at the time of writing. 4 possible strategies are identified by which investors can contribute to the creation of impact. The paper provides an explanation of each strategy, as well as examples of concrete types of actions or behaviour that investors could pursue as part of each strategy. Attention is also given to how the strategies relate to one another and how they might reflect differences in private and public markets.
What the reviewer found helpful:“A well-balanced piece that explains each strategy in detail while also highlighting its associated challenges and potential issues – excellent starting point for discussion.”
Yinni Hu
Advanced