Today, The World Economic Forum launched From the Margins to the Mainstream: Assessment of the Impact Investment Sector and Opportunities to Engage Mainstream Investors, providing a market assessment and recommendations for how mainstream investors can more actively engage in impact investing.
The report, which synthesizes interviews and conversations with over 150 impact investing stakeholders globally, highlights Vital Capital’s success on-the-ground throughout Sub-Saharan Africa and its pioneering organizational structure of having separate impact and financial analytical teams.
Eytan Stibbe, Founder and Managing Partner of Vital Capital (www.vital-capital.com) said, “We believe that to support and advance the significant social change in sub-Saharan Africa requires investing at-scale and in a way which aligns the interests of the local populations, the governments and investors. To this end, investing in this type of comprehensive community development – both rural and urban – that includes high-quality affordable housing and which integrates access to quality utilities, healthcare, education, social services, financing and more creates both vibrant places to live and durable economic ecosystems. The result is a reduction of poverty, the opportunity and benefits of home ownership and significant improvements in all aspects of life for the residents. Delivering these types of tangible results, while simultaneously delivering attractive returns for investors, is Vital’s focus and what we believe is the future of High impact investing”.
An example is Vital’s investment in Kora Housing. Kora is designing, constructing and delivering fifteen completely new communities across six provinces in Angola. Each includes access to modern utilities and social infrastructure such as health care, social services, recreational and retail facilities. Vital’s initial investment is developing of tens of thousands of 100 square meter high-quality, affordable homes, impacting over 240,000 people and is on track to achieving its targeted 18% IRR.
Impact investing – an investment approach intentionally seeking to create both financial return and positive social impact that is actively measured – has been lauded as an emerging investment approach with the potential to reconcile key shortcomings in traditional financial markets.
Vital Capital (Vital) is an impact investing private equity fund with more than USD $350 million of assets under management purposed to simultaneously achieve measurable improvements in the quality of life of local populations in developing countries and deliver optimized financial returns to its investors. Focused primarily on sub-Saharan Africa, Vital is one of the world’s largest impact investors. Learn more about Vital Capital and their work by visiting www.vital-capital.com.
As impact investing continues to gain momentum, the World Economic Forum has been at the forefront of leading research, dialogue and action in what is a growing and powerful twist on alternative asset investing – a means by which investors can do good and do well at the same time. As an important part of this effort, the “From the Margins to the Mainstream” report was undertaken to examine this burgeoning industry and to identify trends, opinions and real data from academics, governments, NGOs, philanthropic leaders and investors.
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Specific Quotes from the Text
- “Impact investing need not conflict with fiduciary responsibilities; investment committees should consider those responsibilities as they craft strategies to manage investments that target financial returns and superior social performance. Impact investing does not imply a trade-off between social outcomes and financial returns, but rather supports the simultaneous dual objective of both.”
- “Social objectives may in fact create long-term sustainable financial returns. Some investors (e.g. Vital Capital) have had success by having two separate teams (i.e. one for financials and one for impact) manage the investment from initial evaluation through due diligence to post investment periodic assessment.”
- “Vital Capital has committed to build new urban communities including 40,000 affordable houses in six provinces throughout Angola. The investment seeks to not only provide affordable housing units for the local population, but also provide a full spectrum of elements for a vibrant life, including recreation areas, clean water and sanitation, power, education, social services, and health services. These combine for better employment opportunities, cohesion, and empowerment in an integrated community environment. In addition to measurable improvements in the quality of life of the residents, the IRR is on track to achieve the +18% target.”
