Bamboo Finance, a pioneering private equity firm in the field of impact investing, and in 2014, committed to leading the development of an outcome-based approach to impact investing that will include the collection and sharing of data along with a framework that can be applied to assess the effectiveness of private equity impact investments.
Bamboo Finance would like to answer the following question: Does investing in companies that provide access to essential goods and services improve the lives of the individuals they intend to serve? Through their new fund: Global Access, they will seek to answer this question. The Fund will invest in companies that provide access to healthcare, financial services and energy. They will develop and apply an investment filter that will go beyond measuring the number of individuals reached and jobs created towards an outcomes-based measurement approach.
Bamboo Finance with its partners will develop and apply an approach that addresses the diverse needs of low-income consumers and the unique business models designed to serve these communities. Bamboo will be raising technical assistance funding to cover the costs of outcome measurement and validation as part of its Commitment. An objective of the Commitment is to produce a model that can be used as a guide for the field along with a method for sharing client data in order to reduce costs and increase our collective effectiveness.
With million in assets under management (AUM) and 46 investments operating in 30 developing countries, Bamboo Finance has been instrumental in the development of the field of impact investing. Through the deployment of its first two funds: Financial Inclusion and Oasis, Bamboo Finance has provided access to essential goods and services to over 10 million individuals to date and created over 20,000 jobs, and has consistently applied a proprietary impact output measurement and management system to the investments of both Funds.
Identify and secure partners.
Raise funding for Global Access Fund and technical assistance funding.
Continue to raise funding for Global Access Fund and technical assistance funding.
Develop an outcome-based measurement framework and process for implementing the outcome-based measurement framework to the equity investments of the Global Access Fund.
Begin implementing the outcome-based measurement framework with equity investments made by the Global Access Fund.
Report on progress and findings from application of the framework and process.
Present case study to broader community on the application of the framework and process.
Report on progress and findings from application of the framework and process along with outcomes from equity investments made through the Global Access Fund.
An investor's social return depends on the outcomes produced by the companies they invest in. Those companies can have impact through the goods and services produced and delivered as well as through their operations. The theory of change framework that underlies the assessment of a company's impact makes a distinction between outputs and outcomes: An output is the product or service produced or delivered by a company; the outcome is the effect of the delivered product or service on the client's life.
The field of impact investing has made significant progress towards measuring the social and environmental outputs of investments and environmental, social, and governance (ESG) practices. Initiatives such as the Impact Reporting and Investment Standards (IRIS) and the Global Impact Investment Rating System (GIIRS) contribute standardization and harmonization and allow greater transparency in measuring outputs and practices. However outside the field of microfinance, there have been few efforts to evaluate the actual outcomes of impact investments. The question of what works and what does not work in impact investing has largely been left unanswered. Yet, recent innovation in social finance 'pay-for-success' models such as the Global Fund to Fight HIV, Tuberculosis, Malaria and Social Impact Bonds are demonstrating that it is possible to invest based on outcomes.
Bamboo Finance is seeking research, funding, media, and strategic partners across the value chain of impact investing in the agriculture, energy, financial services and healthcare sectors who will be responsible for contributing to establishing the outcome model: metrics to track, targets to establish for each outcome and reviewing and validating the fund's effectiveness in reaching the established outcomes. Partners will support us in building momentum, providing data and ongoing feedback. They are also looking for organizations with deep knowledge of international development along with foundations with deep knowledge of the sectors who are seeking to play a catalytic role in the advancement of impact investing from output to outcome-based investing.
Bamboo Finance will be making equity investments targeting commercial/market-rate of returns and offering an estimated $105 million for loans to microfinance institutions and $37.5 million for equity investments in companies benefiting low-income communities in developing and emerging markets globally. Theirequity investment will be conditional upon the investee's participation in developing and applying the outcome-based framework created as part of this Commitment. Partners will also benefit from Bamboo Finance's impact investment experience deploying $250 million in private equity investment capital.