What is an impact investment and what are the key elements of setting up an Impact Investment Fund?
1. What is an impact investment?
Investments made into companies or organisations with the intent to contribute to measurable positive social or environmental impact, alongside a financial return.
2. What are the key elements of setting up an Impact Investment Fund?
2. 1. Intend
– Aspiration to increase environmental and social outcomes.
– Investment capital (private placement of equity either at market or concessional terms) and/or
– Additional support by means of knowledge transfer, control, influence, etc.
2. 3. Quantifiable Outcome
– Formation or developments of markets
– Progresses in the outputs of invested entities or improved processes
– Upsurge or enhancements in environmental and social outcomes
Key elements of setting up an impact investment fund:
Effective fund design comprises three key elements:
– an investment and impact thesis;
– fund foundation and structure; and
– coherent economics