Impact Maximization

Private equity has a distinct advantage in effectively generating impact:
Investment choices maximize the impact that a fund can make:

Key Strategic Choices:

Choice of region / countries

  • Invest in frontier market countries that are solid investment destinations with good rule of law
  • Countries with low level of penetration by private equity and private international investments in general (due to language / cultural barriers, as well as misperception of investment risk)

Choice of target industries and sectors

  • Economic sectors that address acute physical needs of local populations and serve as key engines for economic growth and social development
  • Sectors where companies feature strong Environmental, Social and Governance (ESG) benefits

Choice of companies to invest in

  • Companies that are able to achieve impact as a core component of their operating model and strategy
  • Business models that can achieve large scale, becoming “regional champions”
  • Firms with solid economic fundamentals and large potential investment returns, but limited access to alternative capital sources

Generation of company-level impact

  • Creation and measurement of company-specific impact objectives
  • Creation of new jobs for the local community paying, where possible, above local averages
  • Enhancing of workplace benefits and safety; providing training opportunities to workers and the community
  • Meeting and, where possible, exceeding applicable laws and regulations
  • Implementation of enhanced accountability, governance and transparency procedures

Sustainability of an impactful business model

  • Ensure that the impact-generating business model is profitable and sustainable through business cycles, changes in external conditions (e.g. commodity prices), and other factors of potential influence
  • Embed impact generation deeply into the companies’ operating principals and internal culture
  • As companies are prepared for a potential exit, target buyers who will be able to continue and expand the impact mission the sold firms

Impact Framework: