Panel, Conference Presentation
Impact Investing: The Art of the Deal
Milken InstituteDave Chen, N. Lee, Sari Miller, Eitan Stibbe, Martha Minowski, Ann Coopermann, Chip, Andy Cooper
- Equilibrium Capital Group aims to generate "sustainable alpha" and market-rate returns over the next decade by investing in sustainable real assets, asserting that sustainability creates growth opportunities and that investors ignoring trends like global demographics and resource consumption by 2030 will face increased risks.
- The Impact Investment Exchange plans to facilitate capital into 15 Asia-Pacific countries by matching 230 accredited investors with opportunities based on sector interests or philanthropic motives, while also utilizing an SPV model for a specific Indian deal involving 17 investors to lower reporting costs.
- Sari Miller anticipates the micro-insurance market in Africa will expand to service 22 million people, with All Life targeting over 250 employees by the end of the current quarter; the model expects blood test improvements of 15% for policyholders, generating profits for reinvestment despite the absence of exits to date.
- Eitan Stibbe intends to invest $200 million in equity across $2.2 billion in African housing projects to reduce prices to under 50% of current market levels, while Vital Capital Fund raises $350 million in an Africa fund and $200 million in an 8 Miles sub-fund to spread risk, maintain management control, and execute exits after transferring business skills to local partners.
- Green real estate manager GED seeks to demonstrate that energy and water-efficient buildings deliver superior net operating income, appreciation, and longevity compared to inefficient assets, while Dave Chen predicts that environmental services markets for water, biodiversity, and wetlands credits are evolving into billion-dollar sectors.
- N. Lee expects social stock exchanges, such as the initiative in Mauritius, to increase capital flows by allowing restricted retail and institutional investors access to the private impact space, addressing liquidity and mandate constraints.
- Dave Chen predicts that product companies in developing countries reaching $20 million to $100 million in revenue will transition from being viewed as social enterprises to consumer or business financing entities, creating inefficiencies that third-party financiers aim to resolve.
- The panel expects outcomes-based securities to replace previous social impact bond mania through rigorous analysis and benefit model negotiation, while maintaining that authentic partnerships with governments and regulators are essential due to the complex, multi-stakeholder nature of these deals.
- Measuring impact through contextualized frameworks like GEARS and IRIS is viewed as essential to distinguish impact investing from traditional private equity, with the expectation that methodologies must be adapted for specific countries and sectors.
- Capital deployment strategies anticipate philanthropic funds supporting early-stage infrastructure and loan loss reserves, while impact investors operate in a "zero-return grant" free zone targeting the upper right quadrant of financial return and social impact.