Growth of

Social Capital Markets

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or
the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their use. Terminology used may not necessarily
be consistent with ADB official terms.
 www.asiaiix.com 

Growth of Social Capital Markets

4 March 2011
 What is Impact Investing?
Investments
Investments intended
intended to
to create
create positive
positive social
social impact
impact beyond
beyond
financial
financial return
return

… to generate
Provide positive social or
investment capital environmental
impact

Business designed with

Expect
intent…
financial
returns
Source: J.P.Morgan Global Research, Rockefeller Foundation - Impact
Investments: An Emerging Asset Class

Impact Forum for Social Change
 $500 Billion Potential Market
Investment Philanthropy

Global Managed 
Assets: $53Tn
ESG Focus: 
$20Tn
SRI: $7Tn
Impact  Philanthropy: 
Investing:  $310Bn
$500Bn

Sources: BCG asset management industry survey (July 2010)

United Nations Principles for Responsible Investment
Monitor Institute: Investing for Social and Environmental Impact (2009)

Impact Forum for Social Change
But is it achievable?

Impact Forum for Social Change
Demand for Impact Investments from SEs

Potential
Potential invested
invested capital
capital to
to fund
fund selected
selected BoP
BoP businesses
businesses over
over the
the next
next
10
10 years
years

Sector Potential investment required, 
USD bn
Housing: Affordable urban housing $214 ‐ $786
Water: Clean water for rural communities $5.4 ‐ $13
Health: Maternal health $0.4 ‐ $2
Education: Primary education $4.8 ‐ $10
Financial Services: Microfinance $176

Source: JPMorgan Global Research/Rockefeller Foundation

6
Supply of Impact Investment Capital: US Retail
` U.S. Retail Market Study
` $120 billion potential today
` ~50% of Americans 
interested in Impact 
Investing
` Minimal cannibalization of 
charitable donations 
(~10%)
` Increased investing activity 
after first impact 
investment

Source: Hope Consulting (2010)

Impact Forum for Social Change
$0.5 Trillion

Impact Investors
Triple Bottom 
Line Investors
What will it take to deliver the potential of 
impact investing?

Research
Facilitate Build Catalyze
and
leadership infrastructure intermediation
advocate

IRIS

Impact Forum for Social Change
 Impact Investment Exchange Asia (IIX)
` Creating platforms to facilitate capital raising by Social 
Enterprises 

The Mission

To provide a liquid and transparent market where:
Social Enterprises can raise capital for expansion to scale 
their social and environmental impact
‐ and ‐
Impact Investors can achieve both financial and social / 
environmental returns

Impact Forum for Social Change
IIX Launch Phases
Social Enterprise Capital Absorption Ability
Low High

Impact Partners Impact Exchange

Social Enterprises Venture Funding ready Private market ready

• Limited funding history • Significant funding history

Impact Investors • Market entry for Social Venture • Exit strategy for SVFs
Funds (SVFs) • Market entry for Institutions,
HNWIs
Ecosystem Players Accountants, lawyers, specialized Investment bank involvement
financial advisors

Impact Capital Raised $ 250K + $ 5 M onwards

Launch Date: Q 1 - 2011 Q 1 – 2012

Impact Forum for Social Change
 Thank you

www.asiaiix.com
info@asiaiix.com

…Capital Markets for Social Good
 Growth of
Social Capital Markets
Business Book
Bestseller List

6 University Curricula

50 Global Libraries
in 7 Countries

Published April 2010

(John Wiley & Sons)

CONFIDENTIAL © 2006-2011 HIP Investor Inc. 14

 Disclosure and Assumptions

The HIP Portfolio results represent the results of actual trading since inception by means of the application of a model,
assuming a $100,000 beginning portfolio. Client results may differ depending on the size of account, timing of trading and
reinvestment of dividends. There are inherent limitations of showing composite portfolio performance based on model
results. Unlike actual client-performance records (which can vary by client), model results cannot accurately reflect the effect
of material economic or market factors on the price of the securities, and therefore, results may be over or under-stated due
to the impact of these factors. Since model results do not represent actual client-specific trading and may not accurately
reflect the impact of material economic and market factors, it is unknown what effect these factors might have had on HIP's
decision making if HIP Investor were actually reporting client portfolios. During the period for which model results are shown,
securities of U.S. companies have generally been rising, and the model returns are partly a function of this market
environment. If this environment were to change materially, the model results portrayed by HIP would, in all likelihood,
reflect results different from those portrayed.

The HIP 100 Portfolio and the S&P 100 indexed portfolio are actual net-of-fees results since inception of the model on
7/30/2009, including reinvested dividends and stock splits, and each deducts fees and trading costs quarterly based on a
$100,000 beginning balance at the inception date, as a client would have paid to HIP on a quarterly basis in advance for
advisory fees and brokerage costs. During the period for which model results are shown, HIP has maintained the same
investment strategies and advisory services as those that HIP offers to clients. There is potential for loss as well as for
profits. It should not be assumed that the recommendations made in the future will be profitable or will equal the
performance of the securities in the portfolio. The S&P index is shown as a general market indicator and is not available for
direct investment. Tax consequences have not been considered. Investments are managed by HIP Investor Inc as the
investment adviser via separately managed accounts at FOLIO or at Charles Schwab Institutional.

This is not an offer of securities. * Past results are not indicative of future performance.

CONFIDENTIAL © 2006‐2011 HIP Investor Inc.     15
HIP = Human Impact + Profit

Solve  Maximize 
Human 
Needs 
(Do Good)
HIP Profits 
(Make 
Money)

CONFIDENTIAL © 2006‐2010 HIP Investor Inc.     16
HIP’s 5 Dimensions of Measurable Impact
Can Lead to Sustainable, Profitable Growth
HIP companies innovate to  Which can result in sustainable, 
answer five human needs: profitable growth for all stakeholders:

CONFIDENTIAL © 2006‐2010 HIP Investor Inc.     17
Investing for Impact ($Tril) 
Is Growing in Europe and USA

Source: credit-suisse.com
CONFIDENTIAL © 2006‐2010 HIP Investor Inc.     
18
All Types of Investors Are Seeking Impact

CONFIDENTIAL © 2006-2010 HIP Investor Inc. 19

Measure           Evaluate           Allocate

CONFIDENTIAL © 2006‐2011 HIP Investor Inc.     20
Each Asset Class Can be Scored by 
Human Impact + Profit Performance

CONFIDENTIAL © 2006‐2010 HIP Investor Inc.     
21
HIP Global: Singapore 

CONFIDENTIAL © 2006‐2010 HIP Investor Inc.     
22
 Examples of Impact Investing Choices

Now
Urban
Partner-
ship Bank

CONFIDENTIAL © 2006‐2010 HIP Investor Inc.     
23
HIP Serves Investors 
Seeking Impact + Profit

CONFIDENTIAL © 2006‐2011 HIP Investor Inc.     24
 Growth of
Social Capital Markets