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2017 | Book

Social Impact Funds

Definition, Assessment and Performance


About this book

This book provides a detailed study of the social impact funds industry. In particular, chapters focus on:
The contextualization of social impact funds within the social impact investment market;
The exploration of features, investment strategy and classification of funds;
An in-depth analysis of the emergent literature; An analysis of case studies of impact funds;A synthetic assessment of the industry, conducted through a cluster analysis; The exploration of investment strategy and mission consistency of funds active in the market aimed to show funds attitude to be defined as “impact-oriented funds”;
The investigation of determinants of funds’ target performance.
This volume will be useful to scholars, students from different academic disciplines such as economics, finance, political science, entrepreneurship, and practitioners who are interested in impact investing and in the financing of social impact programs through impact-funds.

Table of Contents

Chapter 1. Introduction
This chapter contextualizes social impact funds within the social impact investing framework. The chapter synthetically assesses the motivations for which impact investments are growing up and the role played by social impact funds in the industry. Moreover, the chapter presents the aim and the structure of the book, identifying the main themes of any chapter.
Helen Chiappini
Chapter 2. An Introduction to Social Impact Investing
The aim of this chapter is to introduce the topic of social impact investing. For this purpose, the chapter accurately defines impact investments, analyzing the main features and identifying the ‘perimeter’ and nature of SIIs. The market structure is analyzed focusing on: demand-side and supply-side organizations; intermediaries and other institutions involved in the SII market; regulation; and the SIIs market in numbers. Moreover, the chapter describes asset classes among which SII spreads and typologies of financial instruments employed. The topic of social impact measurement is discussed as well.
Helen Chiappini
Chapter 3. Impact-Oriented Investment Funds: An Overview
This chapter presented impact-oriented funds from many prospective: definition, mission, investment strategy, the literature, state of the industry, risks, challenges, drivers for success, and case studies. This overview permits a first investigation of lack of literature on impact funds. The definition of impact-funds mission and investment strategy are still ambiguous; thus, the chapter tries to adapt the OECD (Social impact investment. Building the evidence base, Paris, 2015) definition of social impact investment to impact-oriented funds and provides a firsthand classification of impact-oriented funds split into three categories: commercial impact-oriented funds, non-commercial impact-oriented funds, and quasi-commercial impact-oriented funds.
Helen Chiappini
Chapter 4. A Market Segmentation of Impact-Oriented Funds
This chapter aims to synthetically represent the impact-funds industry, classifying impact-oriented funds into homogeneous groups. The cluster analysis methodology and the correspondence analysis are employed in order to carry out this representation. The analysis shows the statistical relevance of three dimensions—mission, geography, and size—and permits the classification of funds into four clusters: neoclassical, futurist, hermetic, and illuminate.
Helen Chiappini
Chapter 5. How Many Funds Are Really Impact Funds?
The aim of this chapter is to analyze impact funds mission and investment strategy in order to assess whether impact funds show the ‘basic features of impact investing.’ Moreover, this chapter assesses if there are dissimilarities between funds: (1) investing in developing and developed countries; (2) investing in social or environmental sectors; (3) differentiable according to the size parameter. In order to perform this analysis the OECD (Social impact investment. Building the evidence base. Paris, 2015) definition of impact investment has been employed as a ‘standard of minimum requirements’ that any impact investment should demonstrate. A content analysis methodology was applied to answer to the research questions.
Helen Chiappini
Chapter 6. Determinants of Funds’ Target Return
Financial performance represents both an essential element of impact-oriented funds and a factor that can stimulate SII market growth. However, performance analyses of impact-oriented funds are limited. The purpose of this chapter is to examine which variables affect target interest rate of returns (IRR) of impact-oriented funds. Ordinary least square (OLS) method is used in order to conduct the analysis. Results show differences between funds investing in developed and developing countries.
Helen Chiappini
Chapter 7. Concluding Remarks
The chapter remarks on the main topics of the book. Specifically, the chapter highlights the main features of impact investing funds, results of the analyses conducted on a sample of funds as well as challenges faced by the impact-funds industry as a whole. Future research needs are also assessed and discussed in line with the scholars’ and practitioners’ perspective.
Helen Chiappini
Social Impact Funds
Helen Chiappini
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