Impact Investing and Health
Impact Investing and Health Initiative by Imprint Capital Advisors focuses on sustainable, ethical, socially responsible investing to address social and environmental issues. The initiative aims to navigate the alphabet soup of investment strategies, including ESG, mission-related investing, and social venture investing. Imprint Capital provides advisory services for impact investments, emphasizing positive social and environmental impacts while managing risks.
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Impact Investing and Health SAN FRANCISCO NEW YORK 641 Avenue of the Americas, 3rd Floor NewYork, NY P: 415.982.5045 | www.imprintcap.com 353 Sacramento Street, Suite 740 San Francisco, CA 94111 P: 415.982.5045 | www.imprintcap.com
Disclaimer. This report has been prepared by Imprint Capital Advisors ( Imprint ) based upon the information provided to Imprint by the firms described herein, as well as from public sources that Imprint believes to be reliable, but such information has not been independently verified by Imprint. Imprint makes no representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of such information, nor does Imprint accept any liability arising from its use or for any analysis or assessment derived therefrom. This report is not intended to constitute an offer of securities of any of the firms that are described in the report. When applicable, investors should completely review all of a firm s offering materials before considering an investment in a firm. Investment advisory services are provided by Imprint Capital, a SEC registered investment advisor. Advisory services are subject to advisory fees as disclosed on Form ADV. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended or undertaken by Imprint Capital) or product made reference to directly or indirectly by Imprint Capital, will be profitable or equal the corresponding indicated performance level(s) shown. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client's investment portfolio. The clients in this case study have been selected as representative institutions and individuals engaged in impact investments, inclusion was not based on performance criteria. The clients do not endorse Imprint Capital Advisors, LLC or any of its affiliates or of any service provided by the Investment Adviser or any of its affiliates. The companies, advisors and any securities identified and described herein do not represent all of all companies, advisors or securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the companies or securities identified was or will be profitable. Past performance of third party advisers and securities may not be indicative of future results. 2
Agenda I. A bit about me, a bit about you II. Understanding and navigating the alphabet soup III. Increasingly diverse set of allies an illustration IV. How to get started V. Your questions (and maybe even some answers) 3
Introductions Me/Imprint why am I here? You why are you here? 4
Navigating the Alphabet Soup Sustainable investing Ethical investing Values investing Socially responsible investing (SRI): Investments designed to avoid or mitigate negative social and environmental impacts Environment, social and governance (ESG) Mission-related investing Impact investing: Investment activity designed to have a positive impact on social or environmental issues Program related investing Social venture investing Mission investing Double/triple bottom line Venture philanthropy Blended value 5
Sifting through the diversity Why: Motivations What: Priority issues Basic taxonomy of approaches 6
Different rationales for impact investing Use more resources for impact Use the right resources for impact Find, support, and learn about enterprise models for impact Values alignment Impact investing 7
RANGE OF SEGMENTS Healthcare delivery IT and admin Supplying care (drugs, devices & diagnostics) Organizing and optimizing care HEALTH CARE Food and nutrition Fitness Wellcare WELLNESS SOCIAL Family economic security Community infrastructure Environmental health DETERMINANTS OF HEALTH 8
SOCIAL DETERMINANTS ENVIRONMENTAL HEALTH Air Green Products Quality Green Built Environment Workplace Safety Career Ladders Transit- Oriented Development HEALTH CARE Childcare Small Business Support Public Transportation WELLNESS Safe Inclusive Insurance Sidewalks & Trails Access to Financial Services Community Facilities Affordable Housing Social Services FAMILY ECONOMIC SECURITY COMMUNITY INFRASTRUCTURE
WELLNESS FOOD & NUTRITION FITNESS School Food School PhysEd Baby Foods Urban Farmin g Play-space Fitness & Recreation Centers Local Food Infrastructur e HEALTH CARE Communit y Groceries Exer-gaming Mobile Fitness Apps Mobile Food Apps Employer Wellness Programs Virtual Coaching Direct- to- Patient Outreac h Peer Groups Remote Monitoring Health Media 10 WELLCARE
HEALTHCARE Low-Cost D,D&D Billing & Payment Simulations & Gaming Scheduling & Back-Office Mobile Diagnostics DRUGS, DEVICES & DIAGNOSTICS HIEs EMRs IT & ADMIN Drug Compliance & Delivery Healthcare Workforce Workforce Optimizatio n Dental Care FQHCs & Safety Net Clinics DELIVERY OF CARE ORGANIZING & OPTIMIZING Self-Health Hospitals & Med Centers Resource Allocation Specialty Clinics Mobile Vans Decision- Support Home Care Risk & Data Analysis Retail Clinics Kiosks Case & Care Management Telemedicine 11
Impact on Risk & Return? There is significant theology on both sides of this question Negative Positive A limited universe intrinsically reduces return expectations Environmental & social drivers are material to business New field and managers equals more risk Growing market opportunities (e.g. Clean Tech) You cannot effectively manage to multiple bottom lines Can reduce risk (see BP) and is a sign of strong management 12
Screening Statistics Estimated Incremental Risk (%) (Standard Deviation)* 0.01 0.00 0.00 0.01 Estimated Tracking Error (%)* 0.50 0.41 0.12 0.60 Negative Screens - eliminate companies involved in: Tobacco Weapons and Firearms FilthyFifteen All Carbon Positive Screens - emphasize companies with better: Environmental Record Corporate Governance 0.85 0.85 0.02 0.02 Environmental Revenue 20% 30% 40% 50% 1.00 1.37 1.82 2.58 0.02 0.05 0.08 0.17 14
Mix of approaches Enterprise Community Engagement 15
Portfolio example Enterprise Community Engagement 16
Allies conventional and otherwise Other people in this room! Community foundations Strategics/corporates Jobs and community oriented funders 17
Healthcare as employment engine: by the numbers Why healthcare? Cause that s where the jobs are Today: 2020: Growth segments: ACO s, managed care, home health, residential Size of growth: 1.3M home aides, .5M orderlies & clerks, .7M nurses Median wages: $20-30k / year; nurses $65k / year +5.7M jobs (half from growth, half age-out replacement) 16.8M jobs, in 784k companies 18
Three tiers of healthcare business models: Seeking non-fungibility of labor Better jobs = better health = better business +1 Neutral models 0 -1 Negative models abusive to labor 19
Business models as driver of health (or not!) Cost Good Jobs Profit Quality 20
Now that theyre sorted, what to do? Investing approaches by tier Better jobs = better health = better business 1. Develop and scale aligned models for direct impact and demonstration 2. Build market share - Support broader transition to aligned models +1 1. Develop clearer ways to identify better practitioners 2. Build business case for better practice 3. Develop levers to support better practice Neutral models 0 1. Avoid screen out 2. Shine spotlight on negative practice 3. Identify better version of presumed abusive models Abusive models -1 21
Where/how people get stuck Actively stuck: Stakeholder divergence Theology of returns for SRI [negligible financial impact] Concern about competing with grant-making Questions about deal flow Passively stuck Overwhelmed/challenge identifying entry point Question of how sourcing, execution and management 22
Learnings and observations Diversity of ways to use investments to drive impact Context matters your organization and your goals should drive many of the tools and approaches Be proactive in the marketplace drives good practice and multiple returns Use or build your strengths knowledge, networks and capacity you have or want to build Seek, manage and measure what matters thesis driven approach Don t create disincentives Importance of internal leadership Action learning avoid abstract debates Be smart about leveraging partners intermediaries, peer organizations and other allies What to do How you do it How you get started 23
Creating a program: Getting to an investment policy statement Mission Objectives Identify target areas and role of investment capital key impact driver? Complement philanthropy? Support interests more broadly? Financial Parameters Integrate with financial management current assets, anticipated expenditures/inflows, liquidity needs, and risk tolerances Determine the level and nature of involvement of various stakeholders; interests, biases, priorities and concerns Context Objectives Allocations (targets and bands/limits) Investment process Decision-making and governance Financial and mission reporting Investment Policy 24
Observations The context drives the right approach there is no one size fits all approach Thoughtful, deliberate execution is critical to success of any mission investing program Finding a clear entry point is critical you can t answer all of the questions on the drawing board Leveraging/intersecting with existing strong processes can be important Investing is investing it is difficult to do well and takes discipline and care 25
