Luxembourg
Social Impact Accelerator
Structure
plus enhancement as from Q3 2014
2013-2014 Pilot Incubation Phase
financing leveraged at all
investment levels
Main investors:
• European Investment
Bank
• Crédit Coopératif
• Deutsche Bank
Dedicated EIF-managed FoF
in support of social impact
investment in Europe
makes cornerstone
investments in
co-investors
Additional funding:
• European Investment
Bank
• Other potential
investors
SIA
further
leverage
local partnerships
social venture funds
“social enterprise
intermediaries”
invest into
co-investment
social enterprises
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active in the following
sectors
education
and skills
skills
and
social
inclusion
underserved
areas
health and
well-being
Investment criteria
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Geographic focus
EU Member States, Accession and candidate countries.
Investment target
SIA will invest in social venture funds or social impact funds which, in turn,
invest in social enterprises.
Definition of Social
Enterprise
For the purpose of SIA, a social enterprise has the following features:
 core business model addresses a social/environmental issue;
 has impact objectives and measures to drive its business model;
 can fund itself from non-grant-dependent funding sources;
 uses its economic means for scaling its social business model;
 if profit-distributing entity, has a dividend policy making any profit
distribution conditional to achieving measurable social impact targets;
and,
 has flexibility in ownership through accessible exit markets.
Type of fund manager
Both emerging and established teams
Sector focus
Core sectors of the social economy including employment, health,
education, social integration, and certain environmental activities such as
environmental preservation and ecological resources management.
Size of investments
 SIA will invest in c. 30 funds (depending on SIA size)
 Stakes in individual funds of up to 49% (depending on SIA size)
Investor role
Lead investor
Key characteristics
SIA intends to pioneer an investment approach that integrates social impact
and investment return objectives. All teams will have to demonstrate their
ability to drive social return at the level of portfolio companies in a
financially stable way and establish impact measures that serve social
entrepreneurs and create transparency for investors.
Investment strategy
 First round to target growth capital proposals that aim to invest
in social enterprises in the EU and Candidate Countries/Potential
Candidate Countries
 Funds will have the critical size to enable meaningful levels of
capital inflows for social enterprises to generate both high social
impact and reasonable levels of financial returns
 Interaction with portfolio companies to define the impact
metrics that will be tracked on a regular basis in the same way as
financial performance indicators
 SIA acts as lead investor
 Active involvement of SIA in governance of portfolio funds through
participation on Advisory Boards/Investors’ Committees
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Targeting a new asset class
Spectrum of Social/Environmental Investment Funds
Funds with ESG
approach
Funds that focus on
companies that operate
on clear corporate social
responsibility and
sustainable development
criteria and best practice
in corporate governance
Clean-tech funds
Funds with strategic
approaches to the
environmental impact of
their investments
already proven investment concepts
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Funds focused on
social impact
Funds that focus on
companies that base their
business models on social
impact targeted products
and/or services
new asset class
EIF aims to raise EUR 300m to
invest in c. 30 funds focused
on this investment model to fill
a funding gap in the spectrum
KEY COMPETENCE:
EIF’s full-cycle investment expertise
Investment
experience
Long-term
investor
Broad skill-set
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Consistent and proactive approach
Market cycle-resistant investment capacity
EIF is biggest VC Fund-of-funds in Europe
Experience of team spans full-cycle investment
management, from deal sourcing through the legal
structuring to investment process and execution
State-of-the-art
processes
EIF maintains highest professional standards and
integrity, and has its own in-house back office, risk
management, legal and compliance functions
Market innovator
Specialised staff operating at forefront of market
developments for meeting market needs
Impact Investing
One year experience as Pan-European social impact
investor
EIF product portfolio for SMEs
SME cash flows
Public stock markets
Portfolio guarantees & credit enhancement
Formal VC funds & mezzanine funds
Social Impact Funds
VC seed & early stage
Microfinance
Business Angels, TT
pre-seed phase
seed phase
start-up phase
emerging growth
development
SME development stages
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HIGHER RISK
LOWER RISK
Example of Social Enterprise
 Enterprise that provides services in the field of software testing building on the
special talents of individuals with Autism Spectrum Disorder
 Target Beneficiaries: Individuals with Autism Spectrum Disorder
 Impact map:
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Input
Activities
Output
Outcome
Impact
Resources invested
in the activity
Concrete actions of the
Enterprise
Tangible products
from the activity
Changes
resulting from the
activity
Outcomes adjusted
for what would
have happened any
way and “collateral
damage”
 Workplaces that
fit Autists’
special needs
• Work processes
structured with
high flexibility
• Assessment
center for the
selection of
candidates
• IT-Manger
• Job Coach
• IT consulting (software
testing, computing of test
scripts, etc.)
• Skill enhancement of the
employees
• Client trainings on
adequate contact with
Autists
• Assessment of the
candidates’ eligibility
• Long-term
employment of
individuals with
Autism in a
working
environment that is
particularly
customized to their
special needs
• Professional
trainings for
individuals with
Autism and client
organizations
• Increased
income
• Increased
qualification
• Improved
“Social
inclusion”
• Increased
income adjusted
• Increased
qualification
adjusted
• Improved “Social
inclusion”
adjusted
Layer 1: connecting social issues to
stakeholders and metrics
social
enterprise
level
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social
impact
fund level
SIA fundof-funds
level
Metrics to serve first and foremost as
guidance for social impact at the social
enterprise level
EIF favours a 3-layers metrics approach
for SIA to preserve the purpose of
metrics for social entrepreneurs
Layer 2: impact measures at
social impact fund level
social
enterprise
level
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social
impact
fund
level
SIA fundof-funds
level
Relative performance compared to set
objectives is measured
Relative measures can be aggregated
Layer 3: SIA performance measured
against same standards
social
enterprise
level
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social
impact
fund level
SIA
fund-offunds
level
Relative social impact performance
measures are analysed at the social
impact fund manager level and
aggregated on a capital-weighted basis
across the portfolio of all social impact
funds in which SIA invests at fund-offunds level
Update on SIA’s activity
 Pilot incubation fund, launched in July 2013, already
almost allocated
 Investors: EIB, Crédit Coopératif, Deutsche Bank
 Transformation into a mainstream activity
 Additional support from the EIB
 Other private investors
 Portfolio/transactions
 1 fund signed in 2013
 1 fund signed in 2014
 4 transactions in final negotiation process
 Strong pipeline of projects
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Summary
 Social impact investing is a market with significant future
growth, involving diverse parties (including the private
sector) to support the social economy
 SIA is a novel fund-of-funds initiative in the social impact
investing market deploying equity, quasi-equity, and debt products in
support of social investment funds
 SIA is based on an investment approach that integrates social
impact and financial return in a balanced portfolio approach
 SIA adds value to the impact investing market through building
market infrastructure and providing a platform for
exchange of stakeholder expertise with respect to relevant definitions,
due diligence standards, and metrics in the area of social impact
investing
 EIF can build on its expertise in launching activities in equity fund
investments, guarantee instruments and microfinance, making it an
ideal platform for the launch of SIA
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Contact
Ulrich Grabenwarter
Melisa Kozak
Aglaé Touchard-Le Drian
Cyril Gouiffès
Jaime Vera Calonje
European Investment Fund
37B, avenue J.F. Kennedy
L-2968 Luxembourg
T: +352 2485 1
F: +352 2485 81301
www.eif.org
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