2/9/16

I went to London Business School primarily to transition from working for the Clinton Foundation to a job in impact investing. At London Business School, I used a variety of resources at my disposal to improve my financial acumen. I built financial models for school assignments, enrolled in extra-curricular valuation courses run by Wall Street Prep, and participated in a school-wide private equity competition.

However, during my first year of business school I didn't find the companies or business models particularly interesting. That changed when I had to evaluate impact investments in my summer internship. While reviewing the financial projections for a network of private schools in South Africa and interviewing impact fund managers in Southeast Asia, I began to understand how the concepts I had studied could create social impact. My summer internship in investment advisory was my first exposure to impact investing and confirmed my interest in the sector.

While applying for full time positions at impact investing firms, I realized that my MBA and 10-week internship still wasn't enough for certain roles. After almost a year of searching I found an internship at Capria, the first global impact fund accelerator, which became a full time role last month. I learned through my experience that it's not easy to transition to impact investing. People with a more traditional finance background don't always have the experience working with social enterprises and people from the social-impact sector sometimes have issues analyzing financial statements or structuring deals.

Fortunately, there are a growing number of resources for people interested in this sector. MBA students can participate in the MBA Impact Investment Network and Training (MIINT) where they can interact with top impact investors and participate in a global competition at the end of the program. The Aspen Network of Development Entrepreneurs (ANDE) also runs a one-week investment manager training for professionals on multiple continents. I attended this training in Brazil, which a former venture capitalist who founded an impact investing deal flow network facilitated. It lasted five days and included:

* Case studies on impact investments and exits including a Fin-tech company in Sub-Saharan Africa and a healthcare company in India
* A presentation from the MD of the leading impact investor in Brazil and a visit to one of their portfolio companies which provides loans in the favelas of Sao Paulo
* Group activities and discussions on topics such as valuation, due diligence, impact analysis and portfolio management.

As a former MBA student with some experience with due diligence, I didn't find the sessions on discounted cash flow analyses or DD informative. However, I really enjoyed learning about innovative ways to structure deals in illiquid markets such as demand dividends and revenue based financing. I also found to session on impact analysis beneficial, as it is important for impact investors to quantify the social value of their investments with the same rigor as financial performance. I would definitely recommend the training to anyone looking to transition to a role in impact investing, both to develop technical skills and for the networking opportunities.

Impact investing is a growing industry and it is important to provide people with the resources they require. In order for the field to continue to advance, we need more programs like the MIINT and the ANDE Investment Manager Training to prepare the next generation of impact investors.

Comments (7)

2/5/16

What are opportunities for people graduating from college to get involved in Impact Investing?

Accepted.com
2/6/16

Some places have entry level positions. I would check out the GIIN job board: http://jobs.thegiin.org/

2/8/16

I will begin an MBA in the Fall. I am coming from the social sector with a goal of transitioning to impact investing. Do you know of any online classes that I can use to start learning finance?

2/9/16

The HBS ones aren't bad. Probably more valuable to see if you can do an internship in finance beforehand. Best way to learn is to do!

2/9/16

Thanks LBS Bloggers

2/11/16

I disagree with what you are saying entirely. No, we do not need more expensive programs to give students a few case studies on impact investing. The problem is that it's not a set path like banking or PE - there aren't the big, established shops that make it easy for the mindless drones to look at and say hey this is the best one that everyone wants to work at so I also want to work here.

To get more involved in impact investing you need to A: learn what impact investing is and isn't - start by looking at the most highly recognized shops and think about what areas interest you and what type of investment strategies you best fit with. Key is to also understand how each firm measures impact. These are just 50 of the hundreds of shops out there.

http://impactassets.org/publications_insights/impa...

B: Start networking - this is a new field and shops tend to be on the smaller side. There are not a lot of openings so you need to be aggressive once you find your niche. To illustrate - very few of the shops on the Impact 50 have a "Careers" page so you need to bust your ass to get noticed. Why pay for these trainings and then realize the hard way that is not how you get a job?

Your last paragraph you try to say that we need to build a new generation of impact investors. The problem isn't a lack of investors - there are a lot of funds and even accelerators for funds like the one you worked on - but instead a lack of resources for aspiring social entrepreneurs in developing nations. We need to plant the seeds before we can taste the fruit, not the other way around.

2/11/16
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