At Impact Africa Capital Partners, we believe that the best way to effect sustainable improvement in the environment and living conditions in East Africa is through socially responsible capitalism.
What is impact investing?
Impact investments are investments made into companies, organizations, and funds with the intention to generate a financial return alongside improvements in social and environmental conditions.
Why invest for impact?
Impact investing is an emerging paradigm shift in philanthropy and the investment community.
Philanthropic donations, grants and other development programs have long been used as the primary tool to promote social and environmental change. The difficulty with this approach is sustainability. Philanthropic funding often goes into a system where resources are quickly used up, and this 'free money' approach creates little motivation for beneficiaries to use resources in a manner where they continue to propagate long-term positive effects.
Impact investing, on the other hand, targets investment capital as a complementary resource for achieving the social and environmental changes typically pursued by philanthropic organizations. The profitability requirement of funding critieria ensures that beneficiaries are financially motivated to use resources in a sustainable manner. By selectively investing in for-profit projects that confer social and environmental benefits, impact investing represents a way for socially and environmentally-conscious individuals and organizations to invest their capital to improve their communities while earning a return that meets their financial objectives.
Impact Africa Capital Partners - Our performance and purpose driven approach
The first bar in our investment criteria is financial performance. Our portfolio companies need to first firmly show their potential to meet our financial return objectives. The second bar in our investment criteria is purpose. Companies in our portfolio need to demonstrate their ability to provide positive health, social or environmental impacts and commit to measuring and reporting their impact in these areas. Only when both of these criteria are met will we invest our seed funding into in an opportunity.
The Global Impact Investing Network is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing.
EMPEA IMPACT INVESTING COUNCIL REPORT: How Private Equity Models and Practitioners Can Advance Impact Investing in Emerging Markets