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2017 | Buch

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Impact Investing

Instruments, Mechanisms and Actors

verfasst von: Dr. Wolfgang Spiess-Knafl, Prof. Dr. Barbara Scheck

Verlag: Springer International Publishing

Buchreihe : Palgrave Studies in Impact Finance

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book is the first publication to provide a comprehensive overview about the market, financial instruments and the associated impact assessment for interested practitioners and academics. Specifically, it will introduce the concept of impact investing within the broader field of social finance as well as the relevant actors, present current financing instruments and the various tools to assess the impact of the investing strategy. This useful reference tool will be of interest to academics and researchers in the field of impact investing.

Impact investing is a dynamic field that has been recently been discussed as a supplemental funding source for addressing societal problems. The topic has generated significant interest and is presumed to achieve double-digit growth rates for the coming years.

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Inhaltsverzeichnis

Frontmatter

1. Introduction

Abstract

Impact investing is strongly linked to social problems and societal challenges, which are changing at an accelerating pace. The way those challenges are being addressed have changed as well. A new generation of entrepreneurs is working on social business models and new investors have become involved in the funding of those approaches. The chapter also differentiates impact investing from other forms of creating social impact and gives an overview of what is discussed in the book.

Wolfgang Spiess-Knafl, Barbara Scheck

2. Social Entrepreneurship

Abstract

This chapter discusses social entrepreneurship as the underlying basics of impact investing. Social entrepreneurship is the most promising form of addressing societal and/or environmental problems as it combines social and entrepreneurial thinking and there are different forms to address societal challenges. This chapter defines social entrepreneurship and discusses the various definitions. It also differentiates social entrepreneurship to other forms of providing social services and also analyzes different scaling strategies. Social enterprises can use different social business model innovations and six different strategies are discussed to provide some insights.

Wolfgang Spiess-Knafl, Barbara Scheck

3. Historical Development and Investment Rationale

Abstract

This chapter covers the phenomenon of impact investing. It will introduce the topic and discuss the rationales of investors to allocate part of their resources to impact investing. Those rationales vary for the different groups of investors who are contributing to the capital in the impact investing market.

There are different theoretical approaches to understanding investment decisions. One key consideration is the interplay between financial and social return requirements. Financial returns are easily quantifiable in the form of EBITDA, net profits or revenues, whereas social goals are not easily quantifiable. Both goals are interdependent and trade-offs can occur when capital providers with different return expectations are involved in the financing of a social enterprise. Traditional public sector funding usually comes with restrictions and has an impact on the financing structure of the organization. Similar restrictions can be observed for the different income streams. Crowding-out can occur when donors and public authorities support an organization.

Wolfgang Spiess-Knafl, Barbara Scheck

4. The Impact Investing Market

Abstract

This chapter covers the market for impact investing which is made up of various actors: networks, social investment advisors, social venture capital funds, ethical banks, social stock exchanges and crowdfunding platforms. Each actor will be described and its role analyzed.

This chapter also analyzes the mechanisms available for impact investors. Socially responsible investments are a popular approach for investors in the public equity or bond market. Pay for success models are increasingly rolled out and social impact bonds are the one form that is used extensively. This chapter will also cover guarantee schemes and public subsidies, as they are important components in this sector.

Wolfgang Spiess-Knafl, Barbara Scheck

5. Financing Instruments and Transactions

Abstract

This chapter discusses the financing instruments and transactions in the space for impact investments. This chapter will discuss the various financing instruments available to fund social sector organizations. Equity capital and debt capital are well-known examples. However, in this field there are also transactions based on mezzanine capital, recoverable grants, forgivable loans, convertible grants, revenue share agreements or grants.

There is also the question as to which social enterprises are being financed. This chapter also takes a closer look at a sample of 342 transactions and shows the transactions sizes and the use of financing instruments. Interestingly, the characteristics of the investee also have an influence on the financing structures.

This chapter closes with an analysis of exits. Investors need to have an exit option for their investments to recover their investment. It will take a look at exits in the ethical products space and also at acquisitions of social enterprises globally. At the moment, the field is still in an early phase and there are only a handful of precedent transactions available.

Wolfgang Spiess-Knafl, Barbara Scheck

6. Social Impact Assessment

Abstract

Social impact assessment is an inherent part of impact investing, the intentional social change an investment is seeking being a prerequisite for every transaction. The chapter thus introduces the concept of social impact by illustrating the most important terms. Furthermore, the purposes as well as advantages when aiming for determining social impact are being discussed.

Wolfgang Spiess-Knafl, Barbara Scheck

7. Assessment Tools and Methodologies

Abstract

The chapter on assessment tools and methodologies offers support for choosing an adequate evaluation method. Furthermore, a summary of the most widely used social impact assessment methods is given as well as an introduction into data-collection methods and indicators. The chapter concludes with an outlook on emerging approaches in terms of efficient data collection and the use of mobile technology in impact assessment.

Wolfgang Spiess-Knafl, Barbara Scheck

Backmatter

Titel: Impact Investing
verfasst von: Dr. Wolfgang Spiess-Knafl
Prof. Dr. Barbara Scheck
Copyright-Jahr: 2017
Verlag: Springer International Publishing
Electronic ISBN: 978-3-319-66556-6
Print ISBN: 978-3-319-66555-9
DOI: https://doi.org/10.1007/978-3-319-66556-6

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