Social Impact Investing

Case Studies and the
Asset Allocation Framework
The objective of this report is to map the Impact
Investment market in a framework that
resonates with investors. For this reason the
Impact Investment sector and case studies
are mapped along the traditional asset classes,
resulting in an Impact Investment Asset Allocation
Framework (AAF). This Framework aims to
combine the traditional asset classes with the
specificities inherent in Impact Investment. The
framework is thus organised along two key dimensions:
investor motivation (Financial First
vs. Impact First) and asset class (as per traditional
asset allocation)
A representation of this concept is shown
on the opposite page.
Understanding the Asset
Allocation Framework
The objective of this paper is to help potential
investors understand the Impact Investment
market better by describing concrete case
studies for each cell in the AAF. The cases outlined
in the following pages were chosen to
show the reader the diversity of Impact Investments
in the sector, especially the number of
investments that aim to make returns at the
market rate.
••
Investment funds/vehicles typically have
multiple investors so motivation for the
fund/vehicle is established in the
following way:
--
If at least one of the investors of an
investment vehicle/fund has fiduciary
responsibilities, then the fund/vehicle is
deemed Financial First because investors
must have been able to satisfy
themselves that a risk-adjusted marketrate
return is being targeted; otherwise
it is deemed Impact First.
••
The allocation to a specific asset class was
driven by the specific instrument used
in the deal profiled; in the case studies
presented an effort was made to select
a deal using an instrument that is representative
of what is commonly used by
the investment fund/vehicle (although it is
worth noting that certain investment funds
may use more than one asset class in their
investments).
The following case studies should not be used
as recommendations for an Impact Investment
portfolio, but rather serve as a guide to the
breadth of opportunities that exist in the sector.
The allocation of case studies to the different
cells in the framework was done on the basis
of the following:
••
The investor motivation is used to allocate
case studies to the Financial First or Impact
First rows of the AAF.
14
Investing for Impact: Case Studies Across Asset Classes