Impact Investment Funds for Frontier Markets in Southeast Asia Creating a Platform for Institutional Capital, High-Quality Foreign Direct Investment, and Proactive Policy Making

Until now, most socially responsible and impact investments have centred on developed markets, with growth potential and investment opportunities in the frontier economies of countries such as Cambodia, Laos, Myanmar, and Vietnam being mostly overlooked. While some individuals and organizations have begun to develop responsible investment opportunities with these countries in mind, large new sources of capital for development could still emerge.

This book explores the greater potential for global investment in Southeast Asia, and the ways in which socially responsible investment styles can be used in their developing economies. It demonstrates how the benefits of investment could create a robust platform for separate stakeholders, including governments, non-governmental organizations, development banks, the financial sector, and small and medium sized enterprises. The author explores how shaping collaborative sustainable investment policies could speed up inclusive development, address the needs of those at the bottom of the pyramid, and ensure sustainable future growth.

Manuel Stagars is a financial innovation consultant and entrepreneur. He has been involved in financial innovation for nearly a decade and is supporting startups as an Angel investor. He is an advisor to corporate and private clients on sustainable investment strategy, entrepreneurship and innovation, with a focus on emerging and frontier economies.

Preface
1. Introduction
2. What Is New in This Analysis?
PART I: IMPACT INVESTMENT: WHERE ARE WE NOW?
3. What Is Impact Investment?
4. Mandates of Impact Investment
5. Impact Investment and Conventional Investment
6. Impact Investment and SRI
7. Philanthropy and Donations
8. Separating Impact Investment Into Components
9. Social Impact Investing
10. Social Entrepreneurship and Social Enterprise
11. Social Entrepreneurship
12. Social Enterprise
13. Characteristics of Existing Impact Investment Funds
14. Characteristics of Impact Investors
15. Making Impact Investible and Measurable
16. Social Impact Bonds and Development Impact Bonds
17. Challenges for Impact Bonds in the Frontier Markets in the ASEAN
18. Funds and Funding Mechanisms
19. Vertical Funds
20. Future-Flow Securitization
21. Front-Loading of Aid
22. Impact Investment Fund Setup
23. Diversified Impact Portfolios
24. Reducing Risk
25. Diversified Impact Portfolio Across the Value Chain
26. Selecting and Managing Investments
27. Positive and Negative Screens
28. Impact Criteria
29. Experience and Mindset of Entrepreneurs
30. Mission Lock
31. Summary and Outlook
PART II: EMERGING AND FRONTIER MARKETS IN SOUTHEAST ASIA
32. Overview of the ASEAN Member States
33. Wealth
34. Investment
35. Current Account Balance
36. Constraints
37. Overview of the Frontier Markets in the ASEAN
38. Investment and Wealth
39. Capacity
40. Urbanization
41. Market Size
42. Industry Sectors
43. Summary and Outlook
PART III: CURRENTLY AVAILABLE CONVENTIONAL INVESTMENT OPTIONS IN FRONTIER MARKETS
44. Frontier Market Investment Overview
45. Exchange Traded Funds (ETFs) and Mutual Funds
46. Private Equity Firms Active in Southeast Asia
47. Summary and Outlook
PART IV: AREAS OF POTENTIAL IMPACT INVESTMENT INTERVENTION IN THE ASEAN FRONTIER MARKETS
48. Bottom of the Pyramid (BoP)
49. Inclusive Development
50. Education and Entrepreneurship
51. Higher Education
52. Capacity Building and Entrepreneurship
53. Beyond Formal Education: Incubators and Accelerators
54. Sustainable Transport
55. Financial Infrastructure
56. Sustainable Urbanization
57. City Prosperity Index
58. Urbanization Trends: Mega-regions, Urban Corridors, City Regions
59. Cleantech and Renewable Energy
60. Disaster Preparedness and Water Safety
61. Medical Services
62. Thailand as an Example
63. Ecotourism
64. Sustainable Farming and Produce Processing
65. Sustainable Coffee
66. Large Potential for Sustainable Farming
67. Summary and Outlook
PART V: CONCERNS AND COUNTERMEASURES
68. Perceived Lower Financial Return of Impact Investment and SRI Funds
69. SRI Funds Perform Similar to Conventional Funds, Outperform in Bear Markets
70. Risk, Return, and Correlation of Impact Investment
71. Size of the Impact Investment Universe
72. Remittances and Diaspora Bonds
73. Foreign Direct Investment (FDI)
74. Complementing Development Assistance and Conventional Debt
75. Fiscal Health of Host Countries
76. Current Account Balance
77. Balance of Payments Cycle
78. Transparency of Frontier Markets in the ASEAN
79. Fraud and Victim Mentality
80. Economic Incentives and Impact Criteria Promote Transparency
81. Risks of Frontier Market Investment
82. Political Risk
83. Legal Risk
84. Operational Risk
85. Currency Risk
86. Counterparty Risk
87. Execution Risk
88. Liquidity Risk
89. Unquantifiable risk
90. Risk Management Strategies
91. Complicated Asset Sourcing and Management Process
92. Is There Enough Demand from Investors?
93. Investors Care for Social Impact
94. Change in Investment Thesis
95. Existing Programs for Sustainable Development
96. Action Plan for Private Investment
97. Summary and Outlook
PART VI: HIGH POTENTIAL OF IMPACT INVESTMENT TO CATALYZE SUSTAINABLE AND RESILIENT DEVELOPMENT IN FRONTIER MARKETS IN THE ASEAN
98. Complementing Existing Sources of Capital
99. Financial Aid Programs
100. Conditional Aid and Development Loans
101. Foreign Direct Investment (FDI)
102. Impact Investment as a Complement to Other Capital Sources
103. Less Dependence on Commodity Price Volatility
104. High-Quality Foreign Direct Investment
105. Attracting Institutional Capital
106. Proactive Policy for Sustainable Development and Impact Investment
107. Summary and Outlook
PART VII: A LOOK INTO THE FUTURE: BUILDING A PLATFORM FOR SUSTAINABILITY AND IMPACT INVESTMENT
108. Platform Thinking and Network Effects
109. Building a Platform for Sustainability and Impact Investment
110. Introducing Economic Motivators in Sustainable Development Goals
111. A Strategy to Move Forward