Impact Investment, + Website A Practical Guide to Investment Process and Social Impact Analysis

Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis is a must-read guide for investors and wealth managers entering the social finance investment space known as "impact investing." This book walks readers through the demanding task of properly executing an impact investment strategy, providing solutions to some of the most vexing challenges that arise when investing for both financial return and social impact. Readers will learn how impact investing is different from other strategies, how the organization's mission affects investment decisions and structures, and what to look for in an organization prior to investing. A running example of a village distribution company illustrates the methods and concepts in action, and a full-fledged case study utilizing downloadable professional level analytical tools consolidates all examples into a real-world setting.

Impact investing is generating significant momentum, but many individuals operating in this space come from alternative backgrounds and lack the knowledge to form a rigorous investment process. Disparate funding sources, immature markets, variations in fund economics, and the need to generate and report social impact all complicate the industry even further, creating a barrier for curious investors. This book is a guide to applying standard investment processes and social impact analyses to impact investing, helping readers:

• Adjust standard analysis techniques to suit the particularities of impact investing
• Discover how social mission influences the entire investment from entry to exit
• Plan and execute a robust custom impact investment strategy
• Understand social impact entities and the management of impact investments

Investing with the goal of social impact doesn't remove the need for rigorous investment techniques and diligent processes. Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis is a guide to putting it all together, for a more targeted approach to impact investing.

KEITH A. ALLMAN is a Director in Deutsche Bank's Structured Credit group, working on esoteric asset-backed securities. Previously, he was a Senior Investment Manager with Bamboo Finance, a commercial impact investment firm managing a unique portfolio of direct venture and private equity investments around the world. He currently engages in impact-related work as a Director on the board for Relief International.

XIMENA ESCOBAR DE NOGALES is the Head of Impact Management for Bamboo Finance, a private equity firm investing in low-income business models in developing markets. She is responsible for impact management throughout the investments' life cycles. Previously she worked at BlueOrchard, the Global Fund to fight HIV%Aids, Tuberculosis and Malaria, and a Swiss Foundation promoting dialogue and economic reconstruction in conflict-ridden countries.

Preface vii

Acknowledgments xi

CHAPTER 1
Introduction to Impact Investing 1

CHAPTER 2
Sourcing and Screening 11

CHAPTER 3
Investment Analysis and Valuation 61

CHAPTER 4
Due Diligence and Investment Structuring 129

CHAPTER 5
The Term Sheet and Definitive Documentation 167

CHAPTER 6
Post-Investment Monitoring, Management, and Value Building 207

CHAPTER 7
Impact Investing Funds 235

CHAPTER 8
Investment Alternatives, Challenges, and Outlook 255

About the Companion Website 269

About the Authors 273

Index 27

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