This percentage has not changed since 2017, although the overall increase in assets means that impact investments in the region are also growing. However, according to my estimates, the post-Soviet region is not yet fully involved and integrated into the world processes and is at a preparatory level. The potential for growth is significant, and with the right approach, the region can become one of the leaders in this field.
Most impact investor offices are located in the USA and Western Europe, and they are often headed by well-known businessmen who understand the peculiarities of the hybrid system of profitable business and the non-profit sector.
For example, from the time of its founding in 2007 until 2018, Omidyar Network was headed by Matt Bannick, who previously served as president of PayPal and eBay International. Based on his practical experience, Matt has developed a university course on evaluating high performance business models in emerging economies and teaches it at Stanford Business School. One of the companies of the Omidyar Group Luminate, which also supports innovative business models in the media sphere, is headed by Stephen King, an experienced top manager who switched to impact investing after several years of managing BBC Media Action.
For impact investors, not only financial profit is of importance, that is, the result, but also the execution process, in which the values of the team must be of the highest standards. The principles of non-discrimination and diversity play an important role. It is believed that the team cannot effectively manage impact investments if it does not understand the market and does not fully represent the part of the population for which it plans to create a positive effect.
For example, in this movement, at professional impact investment conferences, it is considered unacceptable to have discussion panels made up exclusively of male participants, the so-called manels (from the English words men - men and panel - panel), as it has been observed that this is more typical for traditional investment conferences.
One of the main questions in impact investing processes is the measurement and assessment of positive impact, especially when planning social impact. There is no universal template that all impact investors use, and typically each large fund develops its own system for determining impact. Omidyar Network has developed its system, which allocates deals to different investment categories, ranging from the level of expected profit or return on capital and up to a non-refundable grant. Using my knowledge of econometrics, in the process of work I developed another mathematical model that may be more suitable for countries with a transition economy and takes into account their social and economic features. This model allows to calculate not only the contribution to the development of a sector or a project, but also the attribution.
In impact investing, the role of the investment manager is even more complex and important than in traditional investing. As a rule, teams, especially at the start-up stage, cannot themselves formulate a system for measuring their performance, especially in the social sphere. An investment manager must not only understand, and in many cases create a business model, but also develop a system for financing (or refinancing), tracking positive changes, which requires a deep understanding of the subject and the market. At the same time, teams should feel that such systems are effective and practical principles and methods that will help them in their activities. This combination of business and social competencies makes the work of an impact investor extremely interesting and motivating.
Human capital factor in the investee teams plays a big role in impact investing. Impact investors consider the problems with management and implementation of the planned business model as the biggest risks, which does not differ either from traditional direct investment markets or from venture processes.