Welcome to Tigrai Online,      Daily News that matters

Investors turning to impact investment approved funds for viable returns

By Donna Solomons, Cape Town
Tigrai Online May 09, 2013

The concept of impact investing is growing in popularity among the global investment community, encouraging investments into companies and funds with the intention of generating positive, measurable social and environmental impact alongside a financial return.

Increasingly, potential local and international investors are using independently assessed fund rating systems, such as the Global Impact Investment Rating System (GIIRS), to assess the social and environmental impact of South African and African companies and funds, as part of their investment selection criteria.

According to Herman Marais, managing partner at Agri-Vie, the Sub-Saharan private equity fund investing in food and agribusiness, impact investments differ from socially responsible investing, which uses a negative fund screening approach to avoid‘harmful’ companies.

“Impact investors use, in addition, a positive screening approach and actively seek to invest capital in businesses and funds that can harness business and investment disciplines to solve social or environmental challenges in a sustainable manner. It is geared towards positively influencing fund manager practice and offer investors market-rate, or even market-beating financial returns.”

He explains that against a backdrop of food security issues, environmental challenges, employee well-being and global upheaval as a result of stagnant and volatile financial markets, the GIIRS utilises a ratings and analytics approach, similar to Morningstar, which is intended to change investor behaviour and unlock the potential of this new asset class.

“The GIIRS recognises the positive impact generated by a fund and its investee companies and provides investors with rigorous, transparent, comprehensive and comparable ratings of a fund’s impact, grading the fund’s impacts on a scale of one to five stars and an overall score.

“It also allows investor companies to allocate investments into the most ideal fund of their choice, benefiting from benchmark reporting performances, while tracking the impact of their investments,” says Marais.

Three of Agri-Vie’s investments recently received a five-star international rating from GIIRS, outperforming international indices. Agri-Vie invests for above average financial returns and optimum impact.

The GIIRS Fund Rating is comprised of a weighted average of the fund’s ‘Investment Roll-up’ score and its ‘Fund Manager Assessment’ score. To determine the investment roll-up, a weighted average of the scores of the investments in the fund’s portfolio and the total amount invested in each investment (company) are aggregated, which comprises of four impact categories: Governance; Workers; Community; and Environment.

The Fund Manager Assessment score is measured against three categories regarding a fund’s policies and practices in deploying and managing its capital: Targeted for Investment; the Investment Criteria; and Portfolio Management.

The Agri-Vie Fund has completed eight investments across Southern and East Africa and has completed more than 60% of its investment programme. Agri-Vie is among the highest rated impact investments internationally in the food & agribusiness sector. Marais says that the fund is also on track to delivering its targeted, risk adjusted return in keeping with private equity investment performance benchmarks in emerging markets.

“The fund’s mission is to generate an above average investment return, as well as demonstrable socio-economic development and environmental impacts through its private equity investments in food and agribusinesses, and envisages to complete its current investment programme over the next two years.” The Agri-Vie fund manager intends to introduce further investment opportunities to the market in due course.

In December Agri-Vie won the Agribusiness Investment Initiative of the Year award at the African Investor Agribusiness Investment Awards 2012.


Sponsored Links

Sponsored Links

Why Self-proclaimed Kaizen Management is becoming very fashionable in Ethiopia? An Observation

The Radicalization of Ethiopian Muslims: A Solution Worthy of the Serious Threat Posed

Ethiopia should declare the Algiers agreement and the decision of the Eritrea-Ethiopia Boundary Commission null and void

Shabiya sponsored Muslim Extremists trying to stop the Grand Renaissance Dam in support of Egypt

Ethiopian Foreign Minister Dr. Tedros Adhanom meets Ethiopian Diasporas in D.C.

An Empirical Investigation on Innovative Practices of Electromechanical Manufacturing in Mekelle city

Ethiopian Foreign Minister Dr. Tedros Adhanom meets Ethiopian Diasporas in D.C.

Ethiopian Boeing 787 Dreamliner First in the World to Resume Service

Ethiopia's gets $1.2 billion loan for the Grand Ethiopian Renaissance from China

Aboy Sibhat Nega tells it the way it is (Interview)

Under Secretary Tara D. Sonenshine Travel to Ethiopia

Deputy Premier spearheads partnership voyage among Ethiopia-US Universities

Ethiopia to reap benefits from eco-friendly light rail projects

Will Egypt escape the 19th Century mindset and meet Ethiopia half-way

Ethiopian Leases Two New Boeing 777- 300ERs from Air Lease Corporation

Saudi deputy defense minister General Khalid Bin Sultan fired from his job

Google Glass, a computer on a pair of glasses

Ethiopia is the rising star of the adventure travel scene

Survival International's desperate attack on Gibe III dam project

Uganda ready to build 600 MW Karuma Power Plant on the Nile, China will Fund the mega hydro-power project

Uganda ready to build 600 MW Karuma Power Plant on the Nile, China will Fund the mega hydro-power project

Ethiopia is one of the top five booming economies in Africa

Eritrea caught red handed supplying weapons to Central Africa rebels – what is new?

EPRDF's 9th General Congress: Yet, Another Post-Meles Success Story

Eritrean Air Force Captain Rahwa Gebrekristos defected to Saudia Arabia

Ethiopia’s SouthWest Energy says Net Oil Potential 1.56 Billion Barrels to 2.90 Billion Barrels in Gambela and Jijiga

Continuing violations of the UN arms embargo on Somalia and Eritrea

Woyane's successful and productive 11th congress in Mekelle, the capital city of Tigrai

Ambassador Dr. Khalid bin Ibrahim Al Jandan has dismissed statements made criticizing the Grand Ethiopian Renaissance Dam

The Prime Minister Meles Zenawi Foundation founding congress is under way in Addis Ababa, Ethiopia.

Sara Nuru becomes the face and ambassador of LASCANA a high-end fashion company

The Plight of the Southerners in Feudal Ethiopia and their Current Situation:A Southerner’s perspective

Tsedal Yohannes fights to free her family from Eritrean prison

Ethiopian Airlines and Oman Air enter in to code share agreement

Ethiopian Airlines and Oman Air enter in to code share agreement

Why eating injera teff - taff is healthy for you

Ethiopian health sector gets $120 million from world bank

$1 billion worth of fuel oil imported from Sudan to Ethiopia

The Glittering Transformation of Ethiopia is beyond Reproach

Brazil, Russia, India, China and South Africa to establish a bank to challenge IMF and World Bank

The ICG’s six point recommendation for Eritrea transition

An Eritrea man sentenced to more than nine years in U.S. federal prison