A Guide for Impact Investment Fund Managers

A step-by-step resource to creating and managing a private equity impact fund

Using this Guide


How does an impact investment fund manager identify investors? Find investee companies? Create a fund management team? This Guide seeks to answer these and other questions that are core to a fund’s operating and investment strategies. From structuring a fund and raising capital to managing reporting requirements after investment, fund managers take the steps described in this resource to effectively raise and deploy capital towards today’s most pressing social and environmental issues.

Given the prominent role of investment funds in the broader impact investing ecosystem, the GIIN believes that well-funded and managed funds are crucial to realizing social and environmental impact. From 2013-2016, the GIIN trained more than 275 individuals from over 200 different impact investment funds through in-person trainings on fundraising and investment skills in partnership with Avanz Capital. Building on and refining the materials used in those trainings, the GIIN consulted with an additional 80 impact investors and fund managers. The result is this comprehensive Guide, offering self-guided, online training materials directly to new and emerging impact investment fund managers. Each section of this Guide is designed to stand alone, allowing readers to absorb the information through their own pace, and review the specific information that is most relevant to their fund’s particular stage of development. 

Investment funds are the most common vehicle used in impact investing. In the GIIN’s 2017 Annual Impact Investor Survey, fund managers accounted for 67% of the total sample by number of respondents and managed 54% of all assets in the sample.[1] In addition, 71 respondents (34% of the sample) reported investing via fund managers.[2] For the purposes of this guide, an investment fund is defined as a consolidated pool of capital from numerous individuals or institutions, collectively invested in a portfolio of investments. Investors in an investment fund are termed Limited Partners, or LPs. Investors are attracted to this type of investment vehicle in large part because it provides a broader selection of investment opportunities, greater management expertise, and lower investment fees than investors might be able to obtain on their own. 

This Guide includes the following sections:

 

A note for users: While many of the concepts in this guide apply across impact investment products, this guide focuses on private equity because it is the most common asset class used by impact investment funds (by number of investors). Commonly used and important terms are bolded throughout this guide. In addition to this Guide, the GIIN offers in-person training on impact measurement and management (IMM). More information about this course can be found here. If you wish to provide feedback on this Guide, please email training@thegiin.org

 

This online resource is made possible by the support of the American People through the United States Agency for International Development (USAID.) The contents of this online resource are the sole responsibility of the GIIN and do not necessarily reflect the views of USAID or the United States Government.

[1] Abhilash Mudaliar, Hannah Schiff, Rachel Bass, and Hannah Dithrich, Annual Impact Investor Survey 2017 (New York: The GIIN, 2017), 1, https://thegiin.org/research/publication/annualsurvey2017.
[2] Mudaliar et al., Annual Impact Investor Survey 2017, 30.

Stay Connected

Sign-up to receive our newsletter for the latest impact investing news, events, and GIINsights.