Social Impact Investing

More documents

Recommendations

Info

<strong>Impact</strong> Investments: An emerging asset class Global Research 29 November 2010 to 3–8% of household expenditure. This expenditure drops below 1% for households in income bracket D. In an attempt to balance the findings from Monitor with the findings from the The Next 4 Billion, we include bracket E and will leave bracket F out, to be more conservative 63 . Table 15: Target population Brackets A–E, Rural, mm Population Africa 49 Asia 579 Eastern Europe 32 Latin America 23 Total 683 Source: WRI Focus on rural populations, and haircut the penetration rate to target larger villages Having identified income brackets A – E as our target market, we focus on rural populations where access to clean water is less readily available (and the business is more likely to attract customers as a result): This brings us to a target market of 683 million households globally, which is broken down by region in Table 15. As with many businesses operating in these markets, though, the profitability of these filtration units will depend on high volume, which can require that they be located in larger villages 64 . Figure 22 shows Monitor’s analysis of Byrraju's penetration rates by village size. They note that while smaller villages sustain higher penetration rates (perhaps due to necessity), a higher proportion of the larger villages are profitable. As such, we haircut our anticipated penetration rate to accommodate the fact that our rural population will include smaller villages that may not sustain a profitable filtration unit. Byrraju has obtained penetration rates of 40–50% in average-size villages and Water Health is targeting 60%, so we will employ an anticipated penetration rate of 40% (the lower end of the range) to be conservative. As a result, our anticipated customer base is 273 million households. Revenues, margins, capital and profit As noted in Table 12, reaching 273 million households over the next ten years results in potential revenues of $29–$71bn. Applying an operating margin of 10% suggests profit potential of $2.9–$7bn and applying our one-to-one assumption of invested capital to year 10 revenues suggests required capital of $5–$13bn. Figure 22: Penetration rates by village size x-axis: Number of people in the village; y-axis: Penetration rate 120 Small hamlets Av erage v illage Large v illage 100 80 60 40 20 0 0 2000 4000 6000 8000 10000 12000 14000 Source: Monitor Inclusive Markets 63 Monitor confirmed that a significant portion of Byrraju customers earn less than INR 2,000 per month (equivalent to $1,000 in 2005 PPP), putting them in bracket F. If we include bracket F, we add 150 million households to the target population, and about $20–30bn to the capital required. 64 With populations between 5,000 and 10,000 according to Water Health 52
<strong>Impact</strong> Investments: An emerging asset class Global Research 29 November 2010 Complementing government service provision Access to water has recently been deemed a basic human right by the United Nations 65 , and in many countries, access to water is provided by governments. The same is true in the BoP markets we analyze, though in many cases the businesses are successful because of the lack of government provision (particularly in rural areas). For example, according to Water Health, consumption at their water purification plants in Ghana is about 3–4x that of a typical site in India, mainly because of the lack of alternative sources for water in Ghana. In India, by contrast, many communities still have access to water through the Rural Water Supply Programme 66 , even though this water is not what Water Health would consider safe for drinking. Not only will this variation in government provision across regions affect the success of businesses as they start up in different geographies, but it can also be a factor that changes over time, affecting the competitive landscape and long-term prospects of a business operating in this sector. Case studies LifeSpring Maternity Hospital (India) R-Jolad (Nigeria) Health: Maternal care in urban areas Case studies: Maternal care in India and Nigeria Within the health sector, there are many potential businesses we could use for a case study, from pharmaceutical providers to specialist surgical hospitals. We have chosen a maternity hospital chain in India – LifeSpring Maternity Hospital. We complement the analysis of LifeSpring’s business with an analysis of R-Jolad, a hospital based in Lagos, Nigeria that also delivers antenatal care (although its services are broader). These two hospitals are both designed to operate as high volume, low cost businesses and target high occupancy, utilization and turnover rates in order to ensure profitability. LifeSpring, founded in 2005 and currently operating as a for-profit chain of six 20-bed hospitals, broke even after only 18 months operating as a private company 67 . R-Jolad delivers high single figure net margins 68 , having grown from a single-physician clinic in 1982 to a 150 bed, 250 out-patients per day hospital. Sizing summary: $0.4–$2.5bn of potential invested capital; $0.1–$1.4bn potential profit opportunity Given the case studies we reference, there is potential for $0.4–$2.5bn of invested capital to fund hospitals that, like LifeSpring, specialize in maternal health services. Sizing the entire market for healthcare provision is too broad a task for this research piece. Instead, we have identified the capital that could fund maternal health provision, particularly the attendance of births by a skilled professional when otherwise a professional would not have been present. This of course is only one segment of healthcare services that could be provided by impact investment, and given that maternal health has been estimated to account for only 2% of total healthcare expenditures on average in the developing world 69 we can estimate that the total health market for impact investment could be as large as $18–$123bn. 65 General Assembly declares access to clean water and sanitation is a human right, UN News Centre, July 28, 2010. 66 http://www.india.gov.in/sectors/rural/rural_water.php 67 LifeSpring Hospitals, Gita Johar, Columbia CaseWorks, April 26, 2010. 68 The Business of Health in Africa, Annex I, IFC, Dec 2007. 69 Estimate provided by Marty Makinen, Results for Development Institute 53
Page 2 and 3:
Turning the Improbable Into the Exc
Page 4 and 5:
Page 4 of 140
Page 6 and 7:
Page 6 of 140
Page 8 and 9:
6. 1 We disseminate Quarterly publi
Page 10 and 11:
Page 10 of 140
Page 12 and 13:
Page 12 of 140
Page 14 and 15:
23 “His master replied, ‘Well d
Page 16 and 17:
Page 16 of 140
Page 18 and 19:
Domini, shareholder advocacy and co
Page 20 and 21:
Two good things came out this resea
Page 22 and 23:
Fund Azzad Ethical Mid Cap Fund Bri
Page 24 and 25:
Fund Fund A Praxis Growth Index Fun
Page 26 and 27:
development in the US, or are made
Page 28 and 29:
concern, and submitting and voting
Page 30 and 31:
sustain land trusts, to a meeting o
Page 32 and 33:
Page 32 of 140
Page 34 and 35:
that are often excluded from market
Page 36 and 37:
Some organisations that have used S
Page 38 and 39:
it helps identify the critical sour
Page 40 and 41:
Page 40 of 140
Page 42 and 43:
and shareholder trust through posit
Page 44 and 45:
Approaches Some commentators have i
Page 46 and 47:
Wieland and Handfield (2013) sugges
Page 48 and 49:
EthicalQuote (CEQ) tracks reputatio
Page 50 and 51:
Displaying commitment to CSR is one
Page 52 and 53:
Brand Differentiation CSR can help
Page 54 and 55:
takes health and safety, diversity
Page 56 and 57:
advance with the practice of CSR wh
Page 58 and 59:
Stakeholder Influence One motivatio
Page 60 and 61:
Regulation Fifteen European Union c
Page 62 and 63:
jurisdictions. E.g., some jurisdict
Page 64 and 65:
"Impact investments can be made in
Page 66 and 67:
venture capital community. Investor
Page 68 and 69:
countries via local intermediaries.
Page 70 and 71:
determining views of affected commu
Page 72 and 73:
Another measure of economic impact
Page 74 and 75:
Page 74 of 140
Page 76 and 77:
The Board for the CCEG was to inclu
Page 78 and 79:
17 Love Relationship Online dating
Page 80 and 81:
Social Value Act 2012 legislation.
Page 82 and 83:
Development released a report outli
Page 84 and 85:
Benefits and Costs of Social Impact
Page 86 and 87:
UK On 18 March 2010, Secretary of S
Page 88 and 89:
US Massachusetts: The second of two
Page 90 and 91:
US Federal: The U.S. Department of
Page 92 and 93:
would establish a five-year pilot p
Page 94 and 95:
We are dedicated to finding ways to
Page 96 and 97:
In the past, public monies have oft
Page 98 and 99:
indicate that more Americans want t
Page 100 and 101:
Youth" to "Opportunity Youth" in or
Page 102 and 103:
income must file a Form 990. The fo
Page 104 and 105:
In its first three years, SIF has a
Page 106 and 107:
The Office of Social Innovation pri
Page 108 and 109:
of Management at UCLA; and launched
Page 110 and 111:
Page 110 of 140
Page 112 and 113:
Notes _____________________________
Page 114 and 115:
Page 114 of 140
Page 116 and 117:
Investing for Impact Case Studies A
Page 118 and 119:
Contents What is Impact Investment?
Page 120 and 121:
What is Impact Investment? Impact I
Page 122 and 123:
A case study approach in an asset a
Page 124 and 125:
Segments of Impact Investors High T
Page 126 and 127:
Foundations Like high net worth ind
Page 128 and 129:
in the developed and the developing
Page 130 and 131:
By creating mechanisms through whic
Page 132 and 133:
Asset Allocation Framework Asset cl
Page 134 and 135:
Cash Shorebank Deposit Program fina
Page 136 and 137:
Mezzanine/Quasi Equity Instruments
Page 138 and 139:
Venture Capital Bridges Ventures CD
Page 140 and 141:
Real Estate JP Morgan Urban Renaiss
Page 142 and 143:
absolute return (hedge funds) BelAi
Page 144 and 145:
senior debt Root Capital Impact Fir
Page 146 and 147:
Venture Capital Aavishkaar Impact F
Page 148 and 149:
eal estate Ignia Impact First Inves
Page 150 and 151:
senior debt Root Capital Layered St
Page 152 and 153:
The New York City Acquisition Fund
Page 154 and 155:
Appendix Methodology The Investing
Page 156 and 157:
Websites •• Bridges Ventures: h
Page 158 and 159:
Cash Quasi Equity Public Equity Buy
Page 160 and 161:
Page 116 of 140
Page 164 and 165:
SOCIAL IMPACT INVESTMENT: BUILDING
Page 166 and 167:
Page 168 and 169:
Page 170 and 171:
Page 172 and 173:
Page 174 and 175:
Page 176 and 177:
Page 178 and 179:
Page 180 and 181:
Page 182 and 183:
Page 184 and 185:
Page 186 and 187:
Page 188 and 189:
Page 190 and 191:
Page 192 and 193:
Page 194 and 195:
Page 196 and 197:
Page 198 and 199:
Page 200 and 201:
Page 202 and 203:
Page 204 and 205:
Page 206 and 207:
Page 208 and 209:
Page 210 and 211:
Page 212 and 213:
Page 214 and 215:
Page 216 and 217:
Page 218 and 219:
Page 220 and 221:
Page 222 and 223:
Page 224 and 225:
Page 226 and 227:
Page 228 and 229:
Page 230 and 231:
Page 232 and 233:
Page 234 and 235:
Page 236 and 237:
Page 238 and 239:
Page 240 and 241:
Page 242 and 243:
Page 244 and 245:
Page 246 and 247:
Page 248 and 249:
Page 250 and 251:
Page 252 and 253:
Page 254 and 255:
Page 256 and 257:
Page 258 and 259:
Page 260 and 261:
Page 262 and 263:
Page 264 and 265:
Page 266 and 267:
Page 268 and 269:
Page 270 and 271:
Page 273 and 274:
Page 275 and 276:
Page 277 and 278:
Page 279 and 280:
Page 281 and 282:
Page 283 and 284:
Page 285 and 286:
Page 287 and 288:
Page 289 and 290:
Page 291 and 292:
Page 293 and 294:
Page 295 and 296:
Page 297 and 298:
Page 299 and 300:
Page 118 of 140
Page 301 and 302: Global Research 29 November 2010 Im
Page 303 and 304: Impact Investments: An emerging ass
Page 351: Impact Investments: An emerging ass
Page 397 and 398: Page 120 of 140
Page 399 and 400: Advocacy Foundation Publishers The
Page 401 and 402: XVI for Drug-Free Communities Landm
Page 403 and 404:
Vol. VIII 2022 ComeUnity ReEngineer
Page 405 and 406:
Vol. XV 2029 Inner-Cities Revitaliz
Page 407 and 408:
The e-Advocate Journal of Theologic
Page 409 and 410:
Issue Title Quarterly Vol. I 2015 I
Page 411 and 412:
The e-Advocate Juvenile Justice Rep
Page 413 and 414:
2018 - The Theological Law Firm Aca
Page 415 and 416:
About The Author John C (Jack) John
Page 417:
Page 140 of 140
show all

Social Impact Investing

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?