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Investing for Impact

Investing for Impact

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Published by Felipe Arango

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Published by: Felipe Arango on Jul 19, 2010
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10/28/2011

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Root Capital

SENIOR DEBT

Asset Allocation Framework

1 International Finance Facility for Immunisation (IFFIm)

2 The New York City Acquisition Fund

ASSET CLASSES

CASH

SENIOR
DEBT

MEZZANINE
/QUASI
EQUITY

PUBLIC
EQUITY

ALTERNATIVE INSTRUMENTS

VENTURE
CAPITAL

PRIVATE/
GROWTH
EQUITY

REAL
ESTATE

OTHER REAL
ASSETS

ABSOLUTE
RETURN
(HEDGE
FUNDS)

FINANCIAL FIRST

2 Bank
Consor-
tium

1 Retail
& Comm.
Investors
(IFFIm
Bonds)

IMPACT FIRST

1 Various
Countries

2 City
of NY +
Founda-
tions

INVESTING FOR IMPACT: CASE STUDIES ACROSS ASSET CLASSES

34

IMPACT

IMPACT FIRST INVESTOR

FINANCIAL FIRST INVESTOR

Prime Rate

$1.6 B

RETAIL AND COMMERCIAL
INVESTORS

FINANCIAL IMPACT

•IFFIm has been able to raise $1.6B through three offerings to

date

•Due to contractual guarantees from various governments,
IFFIm has been able to retain their AAA/Aaa status

SOCIAL/ENVIRONMENTAL IMPACT

•With money from IFFIm and donors such as the Gates Foundation,
GAVI has been able to protect 213MM additional children with new
vaccines since 2000

•Due to increased vaccination, GAVI has been able to prevent more than
3.4MM premature deaths

•New and underused vaccine coverage has risen substantially, doubling
in most areas

“There certainly is
no discount; each
transaction is priced
at market so someone
doesn’t have to
diferentiate between
our product and another
based upon returns.
When faced with a
decision between
buying a government
bond or an IFFIm bond
with a slightly higher
yield and helping the
immunisation efort,
most people will take the
second .”

George Richardson
World Bank

INTERNATIONAL FINANCE FACILITY FOR IMMUNISATION (IFFIM)
(http://www.iff-immunisation.org)

•IFFIm was launched in 2006 through an initiative of the United Kingdom government to support the GAVI

Initiative

-The GAVI Initiative was launched with a $1.5B grant from the Gates Foundation to fund immunisation
in the world’s 70 poorest nations

•Realising that the social impact of their committed funds will be greater immediately vs. over the 20 year
commitment period, the government sponsors decided to set up IFFIm to tap the fnancial markets to access
funds immediately

•The World Bank, as IFFIm’s agent, manages IFFIm’s fnances and capital markets activities. The World Bank
also coordinates with IFFIm’s donors, manages their pledges and payments as well as IFFIm’s disbursements
for immunisation and health programmes through the GAVI Alliance

GRANT PROVIDERS (VARIOUS NATIONS)

•IFFIm was able to gather $5.3B in grants from 6 European nations (UK, France, Italy, Spain, Sweden and
Norway) when IFFIm was set up, as well as South Africa who joined later

•The grant money was donated over a 20 year period through legally binding payment obligations, starting in
2006 and growing in aggregate amount every year until 2021 before declining through 2026

•Encouraged by the large donations from the Gates Foundation, the nations wanted to provide support to the
global immunisation effort underway by the GAVI Alliance partners

RETAIL AND COMMERCIAL INVESTORS

•IFFIm so far has tapped the fnancial markets to help raise immediate funds based on the $5.3B in
committed dollars

•With a AAA/Aaa rating from numerous rating agencies, they are able to offer returns at a slight premium to
government bonds, offering slightly higher than market returns for their rating compared to governments
with the same rating

•So far IFFIm has been able to raise funds from investors in the US, Europe and Asia through its inaugural
transaction in 2006 and in Japan through two issues specifcally for the Japanese market. The latest offering
will target both retail and commercial customers in the UK with an offering by HSBC

GEOGRAPHY

70 Poorest Nations

AREA OF IMPACT

Vaccination

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