Impact investing is a dynamic field that has been recently been discussed as a supplemental funding source for addressing societal problems. The topic has generated significant interest and is presumed to achieve significant growth rates for the coming years. This book provides a refreshed yet comprehensive overview about the market, financial instruments and the associated impact assessment. Specifically, it covers the concept of impact investing within the broader field of social finance as well as the relevant (and new) actors, presents current financing instruments and the various tools to assess the impact of the investing strategy, and introduces valuation and fund modelling techniques which impact the investment decision of fund managers. This useful reference tool will be of interest to academics and researchers in the field of impact investing alongside students and practitioners in the space.
Author(s): Wolfgang Spiess-Knafl, Barbara Scheck
Series: Palgrave Studies in Impact Finance
Edition: 2
Publisher: Palgrave Macmillan
Year: 2023
Language: English
Pages: 162
City: London
Contents
List of Figures
List of Tables
1 Introduction
1.1 Context
1.1.1 Social Enterprises
1.1.2 Societal Challenges and Changes in the Social Sector
1.1.3 Capital Providers
1.2 Impact Investing
1.3 Outline of the Book
Bibliography
2 Social Entrepreneurship
2.1 Social Entrepreneurship at the Core
2.1.1 Introduction
2.1.2 Defining Social Entrepreneurship
Conceptual Challenges
Legal Forms of Social Enterprises
2.1.3 Differentiation from Other Actors
2.1.4 Scaling Strategies
2.2 Social Business Model Innovation
2.2.1 Opportunity Creation
2.2.2 Smart Distribution
2.2.3 Ecosystem Engineering
2.2.4 Cheap Sourcing
2.2.5 Smart Pricing
2.2.6 Inclusive Production
2.3 Thematic Areas for Impact Investing
2.3.1 Introduction
2.3.2 Sustainable Development Goals
2.3.3 Child Labor
Introduction
Definition
Drivers
Bibliography
3 Impact Investing
3.1 Introduction and Definition
3.2 Rationale for Impact Investing
3.3 Investors
3.3.1 Donors
3.3.2 Investors with Reduced Financial Return Expectations
3.3.3 Investors with Market-Oriented Financial Return Expectations
3.4 Impact Investment Theories
3.4.1 Introduction
3.4.2 Trade-Off Considerations Between Social and Financial Return
Introduction
Trade-Off Conflicts
Strategies for the Resolution of the Financing Conflicts
3.4.3 Flexibility Restrictions Driven by Public Authorities
3.4.4 Sustainability Conflicts
3.4.5 Income Streams
3.4.6 Crowding-Out
3.4.7 Conclusion
Bibliography
4 The Impact Investing Market
4.1 Actors
4.1.1 Networks
4.1.2 Social Investment Advisors
4.1.3 Social Venture Capital Funds
4.1.4 Ethical Banks
4.1.5 Crowdfunding Platforms
4.2 The Instruments and Mechanisms
4.2.1 Socially Responsible Investments
Introduction
Investor Profile
Financial Perfofrmance
4.2.2 Outcome-Based Financing Models
4.2.3 Guarantee Schemes
4.2.4 Catalytic Structures
Bibliography
5 Financing Instruments and Transactions
5.1 Introduction
5.2 Financing Instruments
5.2.1 Equity Capital
5.2.2 Debt Capital
5.2.3 Other Forms
Mezzanine Capital
Recoverable Grants
Forgivable Loan
Convertible Grant
Revenue Share Agreement
Grants
5.3 Investments
5.3.1 Structure of the Investments
5.3.2 Exits
5.4 Technical Aspects
5.4.1 Structure of the Fund Industry
5.4.2 Valuation of Social Enterprises
Bibliography
6 Impact Measurement and Management
6.1 Introduction
6.2 Purpose of IMM
6.3 Terminology
6.4 IMM Along the Investment Process
6.4.1 The IMM Process
6.4.2 Pre-investment Analyses
6.4.3 Post-investment Analyses
6.5 Challenges in IMM
Bibliography
7 Assessment Tools and Methodologies
7.1 How to Choose a Method
7.1.1 Introduction
7.1.2 Target Audience of Impact Assessment
7.1.3 Objectives of Impact Measurement and Management
7.1.4 Reporting Determinants
7.1.5 Scope of Impact Measurement and Management
7.2 Existing Impact Measurement and Management Methods
7.2.1 Introduction
7.2.2 Differentiating IMM for Different Financial Instruments
7.2.3 Categorization of IMM Methods
7.2.4 Methods for Assessing and Evaluation of Social Impact
7.2.5 Data collection
The Universe of Data Collection Methods
Indicators
Lean Data and the Use of Mobile Technology for Data Collection
7.3 Outlook
Bibliography
Index
