Impact Investing

Relations between public and private actors are becoming more and more tangled and nuanced and neither public nor private sector has a monopoly on the provision of social value provision. For this reason, we need to understand how their roles have been changed and are co-changing or co-evoluting in the pursuit of social value. The paper discusses the evolving role of business in society, by analyzing how this transition is carried out in practice, and why we need to make Public Private Collaborations evolve in order to generate the innovation necessary to increase the social value generation.

The scope of impact investing is large, embracing numerous instruments in different asset classes. Nevertheless, focusing only on that part which is based on equity investments, impact investing can be associated to the development of new enterprises which combine social impact and financial profitability thanks to the their sustainable, replicable and scalable business models in the social sector. Taking this perspective, this chapter analyses impact investing with the lenses of venture capital theory and practice showing interesting linkages between these two investment approaches. In particular, the focus of the chapter is on mature economies like Europe and the United States, where social needs to be tackled are not necessarily at the very bottom of the pyramid, where public policies still provide an answer, but they are spread across the new poor, such as young families with temporary jobs, elderly people with low pensions, unemployed workers, persons with disabilities.

The paper discusses, for the first time ever, impact investing as a refocus of venture capital on societal impact enterprises. After an overview of the different definitions given to impact investing and a conceptualisation of its investment targets, the paper analyses the similarities and differences between impact investing and traditional venture capital and discusses the reasons for public support to the development of the impact investing market, as governments have typically done for venture capital over the last decades, and presents the Social Impact Accelerator initiative launched by the European Investment Fund (EIF).

Through the example of Oltre Venture, the case discusses the transition from grant making/donations to Venture Philanthropy (which ask the return of the capital) and finally to Impact Investing (where the financial return is strongly combined with the social impact).

What could be a way of defining and circumscribing Impact Investing sector, legally and practically? Who would profit the most in terms of functioning and efficiency? Who would be legally entitled to impact investment destined funds? This paper, prepared for the G8 international taskforce on Social Impact Investments, aims at furnishing a comprehensive framework of Impact Investment targets.

Even if their role has been less explored so far, Governments may become relevant stakeholders of the Impact Investing efforts. Undoubtedly, they are interested in its potentiality to sustain economic development, through new businesses creation and employment opportunities. This position paper, prepared for the G8 international task force on Social Impact Investments, explores the main forms of interactions between Government and Impact Investing.

Impact investing does not express only an investment approach, a way to attract and channel more resources into social ventures. Impact investing may be seen as a new frontier, where innovation, entrepreneurship, management, finance and public policies mix themselves to create and shape new approaches to answer community's needs. This position paper, after an analysis of the different definitions given to the concept of impact investing, gives it a broader meaning and looks at the relation with CSR and Social Enterprise theories.

Impact Investing, according to the SDA Bocconi approach, means scalable business models that can create economic and social value through innovation in products, services and processes, in markets such as education, health, welfare, care for the elderly, social housing once occupied predominantly or exclusively by public sector and traditional not-for-profit organizations.