Peer Learning in Impact Investing

Peer Learning in Impact Investing

Bob Webster | August 10th, 2011

Access to Finance

I just returned from delivering a five day training for impact investment professionals in Mexico City for ANDE (Aspen Network of Development Entrepreneurs). What a great group of talented and committed professionals seeking to make the world a better place through sustainable investments in social enterprises!

During this training, it was clear that there is a need for mechanisms for impact investment professionals to share their experiences and approaches on conducting due diligence, structuring and valuing companies, adding post-investment value and so forth. As the sector is still in its infancy and evolving and as such investing is more than art than science, it is enormously helpful for investment staff to be able to draw from the experiences of their colleagues from other funds and other parts of the world. This is particularly true for folks whose fund organizations do not yet have fully developed processes, knowledge management, etc. to provide the necessary tools for “doing deals”.

What is your typical deal structure? Do you charge a commitment fee? How do you vet the background of the entrepreneur? Could you give me some good examples of post-investment assistance to a portfolio company that had dramatic impact? How do you balance protecting financial returns versus social returns when an investment goes south? These are the types of questions from which impact investing peers can really learn from each other.

As this became readily apparent early in the course, the training team quickly modified the training to allow for many more break-out groups, with the trainers becoming as much facilitators as teachers. Of course, it helped that more than a handful of the participants had enough deal experience that was interesting to their colleagues, regardless of their level of experience. One had the definite feeling that everyone would have loved more time sharing experiences, challenges, solutions, etc. with each other.

If social enterprises around the world are going to have proper access to finance to further their social missions, they must be engaged by impact investing managers that are fully equipped to evaluate, structure and close deals. CDC Development Solutions looks forward to working with ANDE and its members to develop and launch tools whereby investment professionals can learn from the experiences of their peers to do deals that make the world a better place.

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