OBJECTIVE:

This Global MDP Classroom session will focus on how to effectively set-up and manage impact investment funds and apply innovative finance and business models in order to achieve a true impact. Impact Investments have the intention of generating measurable social or environmental impact alongside a financial return – but how can this really be achieved? Are impact investments truly providing financial access for social and environmental businesses? Are appropriate products and structures being used? Are the intended impacts being realized? What are the latest innovative financing models that can be applied? Can agriculture be an attractive sector for impact investment?

This workshop will explore these questions and more through a seminar and interactive case study format. We aim to critically analyze these issues and highlight international and leading best practices on how to effectively manage and achieve impact.  Specifically, we will focus on:

  • Different innovative financing tools and resulting instruments for impact investments, specifically in agriculture and food production;
  • Methods of risk mitigation;
  • Different models for structuring impact investment funds, blended finance models and capital structures, and pooled-securities to develop the financing pipeline;
  • Examine the use of catalytic first loss models, grants, loans, equity, etc. that can be mobilized for impact enterprise and project finance.
  • Creative ways to target small and middle-size enterprises and projects through pooled securities, revolving loan facilities, fintech, and alternative risk assessment and management models.

We will discuss why capital structure matters in aligning diverse interests into new business models for social and economic change to address the Sustainable Development Goals.

Readings:

Yago, Glenn, and Franklin Allen, “Financing the Developing World,” World Financial Review, September-October 2011:44-48.

Designing an Israeli Development Financing Platform:  Towards Sustainable Development Goals, Financial Innovations Lab Report, June 2019.

“Green and Social Bonds:  A High-Level Mapping to the Sustainable Development Goals,” International Capital Market Association, June 2018.  (N. B.  See and click on Spreadsheet Supplement for full Mapping)

Madsberg, S. and Keohane, G., Rockefeller Foundation (eds.), The Innovative Finance Revolution, “Private Capital for the Public Good,” Special Issue of Foreign Affairs, February 2017.

Addy, Chris, et. al., Calculating the Value of Impact Investing, Harvard Business Review, January-February, 2019.

Practical Impact:  GIF’s approach to impact measurement, Global Innovation Fund, June 2019.

Financial Innovation Lab Case Summaries, Milken Innovation Center-Jerusalem Institute.

Sucharita Mukherjee, et.al., “Investing in the Transformation of Financial Access in India,”  Foreign Affairs, October 25, 2017.

African Risk Capacity, Building Resilience to Climate Change in Africa,  January 2014.

“Financing Kidron/Wadi El Nar River Revitalization“. Financial Innovations Lab® Report, Milken Institute, July 2013.

Cooley and J. Howard, Scale Up Sourcebook, Purdue University, 2019

 

Week 3 slides

Week 3 Slido deck