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Transcript of SAN FRANCISCO 353 Sacramento Street, Suite 740 San Francisco, CA 94111 P: 415.982.5045 | NEW YORK...
SAN FRANCISCO353 Sacramento Street, Suite 740
San Francisco, CA 94111P: 415.982.5045 | www.imprintcap.com
NEW YORK 641 Avenue of the Americas, 3rd FloorNewYork, NYP: 415.982.5045 | www.imprintcap.com
Impact Investing and Health
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.
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Disclaimer.
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Agenda
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)
I. A bit about me, a bit about you
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Navigating the Alphabet Soup
Socially responsible investing (SRI): “Investments designed to avoid or mitigate
negative social and environmental impacts”
Impact investing: “Investment activity designed to have a positive impact on social
or environmental issues” Program related investing
Environment, social and
governance (ESG)
Mission investing
Sustainable investing
Ethical investing
Blended value
Double/triple bottom line
Social venture
investing
Venture philanthrop
y
Mission-related investing
Values investing
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Different rationales for impact investing
Impact investing
Values alignment
Use more resources for
impact
Use the right resources for
impact
Find, support, and learn about
enterprise models for
impact
RANGE OF SEGMENTS
HEALTHCARE
• Healthcare delivery• IT and admin• Supplying care (drugs, devices & diagnostics)• Organizing and optimizing care
• Family economic security• Community infrastructure• Environmental health
• Food and nutrition• Fitness• Wellcare
WELLNESS
SOCIALDETERMINANTS
OF HEALTH
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ENVIRONMENTAL HEALTH
COMMUNITYINFRASTRUCTURE
FAMILYECONOMICSECURITY
SOCIAL DETERMINANTS
Public Transportati
on
AirQuality
Safe Sidewalk
s & Trails
GreenProduc
ts
Access to Financial Services
SmallBusinessSupport
AffordableHousing
CareerLadder
s
Green Built Environme
nt
Transit-Oriented
Development
Workplace Safety
HEALTH CARE
WELLNESS
Community
FacilitiesSocial Service
s
Inclusive Insurance
Childcare
“WELLCARE”
FOOD &NUTRITION
FITNESS
WELLNESS
SchoolPhysEd
Exer-gaming
BabyFood
s
HEALTH CARE
Fitness & Recreation Centers
Play-space
Community
Groceries
Local FoodInfrastruct
ure
School
Food UrbanFarmin
g
Virtual Coachin
gRemote
Monitoring
Peer Groups
Direct-to-
PatientOutreac
h
Health Media
Mobile Fitness Apps
Mobile Food Apps
Employer
WellnessProgram
s
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IT & ADMINDRUGS,
DEVICES &DIAGNOSTICS
ORGANIZING& OPTIMIZING
DELIVERYOF CARE
HEALTHCARE
Telemedicine
Resource
Allocation
Billing &
Payment
HIEs
EMRs
RetailClinics
Mobile Diagnosti
cs
FQHCs &Safety
NetClinics
HealthcareWorkforce
Self-Health
Low-Cost
D,D&D
Case & Care
Management
Drug Compliance &
Delivery
Kiosks
Mobile Vans
Scheduling & Back-Office
Risk & Data
Analysis
Workforce Optimizatio
n
Decision-Support
Dental Care
Home Care
Specialty
Clinics
Hospitals & Med
Centers
Simulations &
Gaming
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Impact on Risk & Return?
Negative
A limited universe intrinsically reduces return expectations
New field and managers equals more risk
You cannot effectively manage to multiple bottom lines
Positive
Environmental & social drivers are material to business
Growing market opportunities (e.g. Clean Tech)
Can reduce risk (see BP) and is a sign of strong management
There is significant theology on both sides of this question
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Screening Statistics
Negative Screens - eliminate companies involved in:Estimated Tracking
Error (%)*
Estimated Incremental Risk (%)
(Standard Deviation)*Tobacco 0.50 0.01Weapons and Firearms 0.41 0.00‘Filthy Fifteen’ 0.12 0.00All Carbon 0.60 0.01
Positive Screens - emphasize companies with better:Environmental Record 0.85 0.02Corporate Governance 0.85 0.02
Environmental Revenue20% 1.00 0.0230% 1.37 0.0540% 1.82 0.0850% 2.58 0.17
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Allies – conventional and otherwise
□Other people in this room!□Community foundations□Strategics/corporates□Jobs and community oriented funders
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Healthcare as employment engine: by the numbers
Today: 16.8M jobs, in 784k companies
2020: +5.7M jobs (half from growth, half age-out replacement)
Why healthcare? ‘Cause that’s where the jobs are…
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
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Three tiers of healthcare business models:Seeking non-fungibility of labor
-1
0
+1
Better jobs = better health = better business
Neutral models
Negative models – abusive to labor
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Now that they’re sorted, what to do? Investing approaches by tier
-1
0
+1
Better jobs = better health = better business
Neutral models
Abusive models
1. Develop and scale aligned models for direct impact and demonstration2. Build market share - Support broader transition to aligned models
1. Develop clearer ways to identify better practitioners2. Build business case for better practice
3. Develop levers to support better practice
1. Avoid – screen out2. Shine spotlight on negative practice
3. Identify “better” version of presumed abusive models
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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
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
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Creating a program: Getting to an investment policy statement
Mission Objectives
Financial Parameters
Context
Investment Policy
Identify target areas and role of investment capital – key impact driver? Complement philanthropy? Support interests more broadly?
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
ObjectivesAllocations (targets and bands/limits)Investment processDecision-making and governanceFinancial and mission reporting
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
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