Impact Funds' Best Practice Library

Private equity:

Aureos Capital's Africa Health Fund has an impact-based incentive structure linked to the achievement of one or more of the three impact targets. These targets are related to the proportion of total clients served that comes from the targeted BoP population.

Private equity, venture capital:

In addition to a financial hurdle, Rubio Impact Ventures has set an overall impact hurdle at exit of minimum 60% of their weighted overall social impact target. Every quarter the fund manager calculates its weighted overall social impact target which compares the actual fund impact performance to the three-year impact target set at investment date

Triodos Investment Management has developed a conceptual framework to guide investors in exits. The framework takes into account the feasibility of regulatory approval, exclusionary criteria and financial criteria as well as considerations in cases of minority or majority stakes. 

Incofin Investment Management wants to ensure that the buying shareholder values social impact and will continue to nurture and respect the balance between social and financial return. Their in-house tool reviews 12 indicators including: corporate culture, reason for acquisition, and investment horizon. 

Private Equity:

For each new investment, EV Private Equity conducts an assessment to ensure the target company offers sufficient GHG emissions reduction potential. The firm has developed a proprietary framework, EV IQ, to assess and document emissions avoidance enabled by the technologies or services of a company.

Real Assets:

Foresight Group uses a proprietary set of five criteria to ensure all investments undertaken meet Foresight’s definition of Sustainable Infrastructure: Sustainable Development Contribution, Environmental Footprint, Social Welfare, Governance and Third Party Interactions.

Private Equity:

Bridges Fund Management applies the Impact Management Project’s impact management framework throughout its investment process. This assesses impact across five dimensions: 1) What, 2) Who, 3) How much, 4) Contribution and 5) Risk, the last of which evaluates the likelihood that impact does not occur as expected. Bridges works with investee companies to improve the impact return and risk profile of each investment.

Public Equity:

M&G Positive Impact Fund uses the Impact Management Project's framework to evaluate impact risk, or the likelihood that impact will be different than expected, for each portfolio company. The fund then engages with companies on impact or risk when necessary.

Public Debt:

Wellington’s Global Impact Bond Fund applies a KPI logic chain that presents a linear path from investment through to desired impact outcomes (input > activity > output > outcome > impact). The fund highlights examples of the KPI logic chain metrics used for different portfolio investments in their Global Impact Annual Report

Private Equity:

Mandala Capital is focused on measuring outcomes on eight primary areas of social impact. The organisation uses the social return on investment methodology (SRoI) to obtain impact per dollar invested in order to then aggregate impact at portfolio level.

Private Equity:

Sarona Asset Management has adopted the use of Global Impact Investing Network’s IRIS+ metrics to assess social and environmental performance in a standardised way.

Private Debt:

ILX Fund’s Results Measurement Framework is anchored on the joint measurement system utilised by DFIs and broadly aligned with IRIS+, named HIPSO (Harmonized Indicators for Private Sector Operations). Moreover, the fund reports SDG contribution based on the SDI Taxonomy, developed by leading Dutch Pension Funds, and the DFI’s HIPSO-SDG Framework.

Fund of Funds:

Kempen’s Global Impact Pool publishes a quarterly impact report which includes impact highlights, an impact case study, as well as an overview of financial return, and portfolio highlights and developments.

Public Equity:

The Cadmos Peace Investment Fund’s annual report integrates financial and impact performance. Monthly factsheets also include both financial performance and an update on the engagement strategy.

Public Equity:

WHEB Asset Management engages systematically with companies in their portfolio on corporate governance issues, but also ESG disclosure and governance, and environmental and social issues.

Private Debt:

Tikehau monitors ESG KPIs on an annual basis through an ESG questionnaire comprising of approximately 20 indicators. The results of the questionnaire are used to guide engagements and prioritise areas for improvement for each portfolio company.

Private Equity:

Borski Fund is a female-led Venture Capital Fund based in Amsterdam. As a founding member of the FundRight initiative, Borski Fund strives to achieve gender equality by investing in female-led companies. Borski Fund also keenly encourages women to join their team.

Private Equity:

Nuveen Global Impact Fund is managed by a gender balanced team. Moreover, Nuveen publicly commits to promoting diversity and inclusion within the organisation through an Inclusion & Diversity Committee and a number of employee initiatives.

Private Equity:

RAISE Impact has published a video explaining their proprietary impact measurement methodology. The methodology allows the fund to gauge a company’s impact level regardless of its size and to quantify impact volume by weighting impact level by impact revenue.

Private Equity:

Nuveen Global Impact Fund is managed by a gender balanced team. Moreover, Nuveen publicly commits to promoting diversity and inclusion within the organisation through an Inclusion & Diversity Committee and a number of employee initiatives.