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

Praise for Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis

"A detailed guide which is a ′must read ′ for new and seasoned investors as well as those seeking investments to support entrepreneurial, social, and environmental ventures that aim to generate financial returns. The manual describes every step of a rigorous investment journey from investment analysis and valuation, to preparation of a term sheet, to closing the deal and post–investment monitoring and exit. In that sense, it is a primer for anyone wishing to understand what a thorough financial investment process looks like, whether an investor or an entrepreneur seeking investment. It draws on hypothetical impact investment candidates, enhanced by an accompanying website to illustrate each step of the investment components in greater detail. However, the book goes one step further by including considerations that should lie at the forefront of considerations by a growing spectrum of investors seeking positive social/environmental outcomes as a result of their investment choices. The value of this guide lies in its ability to highlight the complexities inherent in the impact investment process."
Pamela Hartigan, Director, Skoll Centre for Social Entrepreneurship, Saïd Business School, University of Oxford

"The only informed and practical approach to impact investment available today."
Davis Broach, Lecturer Practitioner, American University

"Impact Investment is a compelling guide for anyone who wants to use investment as a force for good. Keith and Ximena use a comprehensive case study to teach us how to simplify the seemingly complex process of social impact analysis in the investment process. They show us the critical role impact measurement systems can play in judging performance and making rigorous investment decisions by measuring what matters, we can make successful investments that also make a difference in the lives of all stakeholders."
Andrew Kassoy, co–founder, B Lab

"Keith Allman and Ximena Escobar de Nogales have produced the first comprehensive, practical review of impact investing. A coming of age that coincides with the slow maturing of that field of social investment and a professional review of how to navigate the treacherous waters of hybrid investment models, where historically social impact and profitability often generated more conflicts of interest than real benefits. The authors provide a well–balanced account of how to keep that ship on a virtuous course."
Dr. Benoit Leleux, Stephan Schmidheiny Professor of Entrepreneurship and Finance Director of the IMD; Lombard Odier Global Family Business Award IMD (Lausanne, Switzerland)

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

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.