It is often assumed that all impact investors need is a pipeline of investable ventures. Recently, IBA invited Netherlands-based impact investors active in developing markets to discuss the current environment for sustainable investments, the challenges they faced in achieving their objectives, and the support they need. The goal of this meeting was to strengthen the ties within the Dutch impact investing sector by initiating connections and exploring synergies.
Previous investor meetings have revealed a lack of collaboration between investors, while knowledge-sharing on topics such as deal syndication, due-diligence and country experience, could add great value to their work. For this meetup, we asked investors key questions and their answers highlighted a very specific set of expectations. So, what do Dutch impact investors actually need in order to do both well and good?
More practical answers, less general information
Investors want insider tips on how to do business with the Bottom of the Pyramid. Insights on local governance, taxation policy, and judicial systems are valuable and sought after. Information of this type being non-existent or patchy at best, the need for a coordinated data-set on the inclusive business investment climate was high on the investors’ agenda. In addition, a collection of best practices per sector, such as growth investments in food supply chains, or per country (see post investing on Inclusive Business in Mozambique) was also seen as useful.
Less jargon, more easily digestible language
With the rise of impact investment and the increase in number of players from a diversity of fields, there is a need for a common understanding of impact investment, along with key characteristics and alignment of terminology. This is critical to take discussions to their full potential in a diversity of geographies, business models, sectors, and governance environments.
A better understanding of the BoP consumer
Impact investors are increasingly interested in the consumption and spending behavior of a typical ‘BoP’ consumer. This is essential in order to understand whether the products they invest in match actual needs, instead of distorting the markets as has been the case with many innovations.
Reliable information from local sources
Impact investors need reliable information and reliable local partners. Due diligence was mentioned last but was certainly not the least important item on the investor wish list. Building a solid, trust-based relationship with investees is critical and starts with a transparent, hassle-free fact-checking process.
Admittedly, there is an underlying need for information-sharing within the Dutch impact investing community, with a number of differences when it comes to the structure and formation of this platform. IBA looks forward to being part of the process of improving the quality and availability of Impact Investment information.