140422_HSG_Hub_Sao Paulo_Oikos

Impact Investing in Brazil
Frédéric Kuonen
Former Impact Investing Platform Coordinator
Oikos Presentation
April 2014
University of St.Gallen (HSG)
HSG Hub São Paulo
Impact Investing
Our understanding of Impact Investing
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“Investments that intend to generate positive impact
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beyond financial return.”
Provide capital
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Expect financial return
 Transactions currently tend to be private
debt or equity investments
 The investment should be expected to
return at least nominal principal
 More publicly traded investments to
emerge
 Donations are excluded
 Market-rate or market-beating
returns are within scope
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Business designed with intent…
 The business (fund manager or company)
into which the investment is made is
designed with intent to make a positive
impact
 Investments with unintentional positive
social or environmental consequences are
not Impact Investments
Source: JP Morgan (2010)
… to generate positive social and/or
environmental impact
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 Positive social and/or environmental
impact should be part of the stated
business strategy and should be
measured as part of the success of the
investment
University of St.Gallen (HSG)
HSG Hub São Paulo
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Impact Investing
A categorization of Impact Investing
Source: Monitor (2009)
University of St.Gallen (HSG)
HSG Hub São Paulo
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Impact Investing in Brazil
A categorization of Impact Investing
Philanthropy
Impact Investing
Sustainable Investments
Priority is social/environmental
support and change through
charitable donations
Main goal is
social/environmental change
combined with moderate
financial return
Main goal is maximized riskadjusted return via
sustainability trends
 Trust & foundations
 Investment in Social Enterprises
 Venture philanthropy
 Value-based investing
 Investments with ESG
screening process
 Sustainability thematic products
as defined by megatrends
Charity (Social Return)
Source: Credit Suisse (2012)
Profit (Financial Return)
University of St.Gallen (HSG)
HSG Hub São Paulo
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Impact Investing
Asset classes and sectors
Sectors
Source: WEF (2013)
University of St.Gallen (HSG)
HSG Hub São Paulo
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Impact Investing
Business model
Source: WEF (2013)
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
The platform aims to support the critical industry transformation in Brazil
Vision: “Act as a leading academic player in the
development to maturity of the Brazilian Impact
Investing Industry over the next decade”
Main Objective
Support building a functioning marketplace/ecosystem for the Brazilian Impact Investing Industry
Why Impact Investing?
Key Values
Creating a new perspective and mindset
complementing the traditional finance industry
Academic, neutral and cooperative, aiming to
bring together all participants of the industry
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
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Impact Investing in Brazil
Main obstacles to emergence of the Brazilian Impact Investing industry
Challenges in Impact Investing*
 Lack of documentation of proven business
models
 Lack of transparency in the investment process
 Lack of standardized metrics for impact
measurement
 Lack of a legal framework for investors
*as identified by Impact Investors in the second Impact Investing Conference organized by the Hub
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
Academic network to support your thesis...
Academic Network
 Wolfgang Reichenberger (Platform Steering Committee)
 Juergen Bruecker (Platform Steering Committee)
 Angélica Rotondaro (Platform Delegate)
 Dietmar Grichnik (HSG Entrepreneurship)
Objectives Academic Network
 Peter Sester (HSG Law & Economics)
 Propose research topics and develop projects
 Rolf Wüstenhagen, Christoph Birckholz (HSG Sustainability)
 Develop academic papers
 Yvette Sanchez (HSG Latin America Studies)
 Christa Binswanger (HSG Gender Inclusion)
 Supervise and guide Bachelor, Master and
Doctoral thesis
 Ernst von Kimakowitz (Humanistic Management)
 Participate in conferences and round-tables
 Thomas Zellweger, Frank Halter (HSG Family Businesses)
 Timo Meynhardt (HSG CVLS)
 Sergio Lazzarini (INSPER Strategy)
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
Current researchers
PhD researchers
Master level researchers
 Christoph Birckholz, Impact Investing in Colombia (R.
Wuestenhagen)
 Estelle Tanner, Decision making factors on Biomass
projects in Brazil (R. Wuestenhagen)
 Mariana de Castro, work in progress (P.Sester)
 Fabian Oppenheimer, Decision processes on portfolio
selection of Impact Investing Funds in Brazil (R.
Wuestenhagen, C. Birckholz)
 Thorsten Helms. Renewable Energies in impact investing
(R. Wuestenhagen)
 Jessica Aschari-Lincoln. Relation between social
financial sources and their social beneficiaries. (U.
Jaeger, U. Fueglisttaler)
 Laurent Mager, Social Entrepreneurs and Impact Investors:
Managing uncertainty in Impact Mediation (C. Birckholz)
 Frédéric Kuonen, Post-deal involvement of Impact
Investors (D. Grichnik)
 Esther Altorfer. Comparing post-investment of venture
capitalists and impact investors: cases in clean technology
Bachelor level researchers
 Angelo Boutalikakis, Comparative analysis of Impact
Investing Funds (E. von Kimakowitz)
 Nikki Böhler, Facilitating the establishment of social
impact bonds in developing countries. (E. von
Kimakowitz)
 Johannes Boch, in the area of measuring impact (T.
Dyllick)
 Paulina Widmer, in the area of microcredit and gender
inclusion.
Source: HSG Hub São Paulo
Objectives Researchers
 Generate knowledge for the platform
 Support solving of practical problems in the industry
 Develop an Impact Investing pilot project in Brazil
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
Fellowship-program – preliminary draft
Impact Investing industry challenges and areas of proposed research
Business model
Investment process
Impact measurement
Legal framework
Impact Investing Fellowship Program
• one PhD student for one year
• two master students for six months
• Third-party Fellowship
Impact Investing Fellowship outcomes
Thesis
Academic article
Academic Network
Case-study
Partner Network
 Supervises and gives feedback to thesis of fellows
 Supports the writing of an academic article
 Promotes the presentation of results at conference
Source: HSG Hub São Paulo
Mentor
 Evaluates
research fellow
 Gives constant
feedback and
support
 Provides casestudy opportunity
 Supports casestudy field-trip
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
Research projects in Brazil - examples of past research projects
Pilot research projects
a. Structuring a business model for Investing in Education including social bonds, pay-forperformance tools, and measuring impact through RTC
b. Research about Meeting Users Needs in Integrated Reporting
 Integrated Reporting Initiative (IR).
c. Impact Investing Funds Mapping in Brazil
d.
Investors’ report for a organic soybeans business in Parana
 Developed by Frederic Kuonen as part of his fieldwork project in Brazil
 Potential case-study
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
Past projects
Investor report and business plan update for an organic soybean producer
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
Internships in Brazil – CooperativeLab
Past internships
Requirements
 Fluent in Portuguese (!)
 Time 6+ months
 Cultural awareness
 Excellent personal record
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
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Backup
FYI
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
The second Impact Investing Conference in August 2013
Conference Facts
 Topic: Enhancing Impact Investing
in Brazil
 In cooperation with Insper,
Swisscam, ICE, Artemisia and
Endeavor
 200+ participants: investors, family
offices, accelerators,
entrepreneurs and academia
 12 top-class speakers
 Panel discussion with accelerators
and family offices on how to
establish better cooperation for
Impact Investing projects
 Three round tables for Investors
and Entrepreneurs on the topics
Education, Social Housing and
Financing
Objective: communicate recent research results and identify challenges in the Impact Investing industry
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
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The HSG Impact Investing Research Platform
Recent developments on facebook, blog and newsletter
URL: http://impactinvestinginbrazil.blogspot.com.br/
Facebook: Impact Investing Brazil
Source: HSG Hub São Paulo
University of St.Gallen (HSG)
HSG Hub São Paulo
Contact
In case of inquiries or further requests
HSG Hub São Paulo
Av. das Nações Unidas, 18001
04795-900 – São Paulo
São Paulo, Brazil
Phone +55 (11) 5683 7449
[email protected]
University of St.Gallen (HSG)
HSG Hub São Paulo
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