LOCAL IMPACT INVESTING AND FINANCIAL SECTOR RESOURCES

NAB RESOURCE REPORTS

“The world is on the brink of a revolution in how we solve society’s toughest problems. The force capable of driving this revolution is ‘social impact investing’, which harnesses entrepreneurship, innovation and capital to power social improvement. By bringing a third dimension – impact – to the 20th century capital market dimensions of risk and return, impact investing has the potential to transform our ability to build a better society for all”

In this groundbreaking report, the Social Impact Investment Taskforce, illuminate the enabling role that governments and the financial sector can play in unleashing investment for solving social problems and furthermore, the Taskforce makes recommendations for building a thriving social impact investing market.

The Annual Impact Investor Survey by the GIIN, provides a descriptive overview of the dynamic and evolving impact investment market. In its seventh edition, the survey received responses from the greatest number ever – 209 impact investing organisation with an estimated $114 billion in assets under management.

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This report offers an analysis of political and economic factors that may inform and influence investment decisions in the Southern African region. The study provides a landscape of the impact investing market in 12 Southern African countries, capturing trends, challenges and opportunities for both social enterprises and impact investors. The report maps impact investing activity by development finance institutions (DFIs), non-DFI investors, social enterprises, government institutions and other ecosystem players.

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SMEs make an outsized contribution to job creation, economic growth and equitable income distribution. Recognising the urgency required in addressing the structural and policy reform required to create an enabling environment for SMMEs, this survey provides insights into both private and public initiatives in entrepreneurship development. The report identifies key challenges and offers a number of recommendations that can be used to inform policy decisions and stimulate entrepreneurial activity.

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Trialogue CSI Handbook provides insights into the spending patterns of corporates with an emphasis on the use of charitable contributions generated as a result of BEE legislation. The most recent recent edition explores in-depth how business might incorporate the United Nations Sustainable Development Goals (SDGs) in order to attain a more holistic impact in their development efforts.

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The report makes a study of the value created for BEE beneficiaries by the top 100 listed companies on the Johannesburg Stock Exchange (JSE). The study observed that empowerment deals conducted since 2000 have generated R317bn in total value attributable to beneficiaries, of which R52bn (16%) is attributable to staff schemes, R196bn (62%) to strategic investment partners and R69bn (22%) to broadbased community schemes.

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This report estimates the size of the endowments that have been created by 35 of the largest 100 JSE listed companies that have established trusts and foundations through BEE deals. Of a total of R51.6bn worth of charitable value created, R32.6bn has been invested in PBOs that will likely spend 10% on philanthropic activities on an a perpetual annual basis. 67% of the funds have an eductaional focus.

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This study investigates the role and effectiveness of community trusts in Black Economic Empowerment transactions. The report considers the history, evolving roles and broader impacts on society of community trusts and similar entities, while problematising the institutional role that trusts have assumed or are expected to assume in development and social welfare in South Africa. PDI beneficiary trusts have been utilised by the private sector as a mechanism to meet their transformations obligations through BBBEE as well as to contribute directly to development and social welfare. The study offers a theoretical framework for investigating the utility of PDI beneficiary trusts to social transformation and development through BEE transactions, and also develops workable models for the successful operation of these trusts.

The inclusion of Trust vehicles in order to broaden the base of ownership in BBBEE transactions is becoming the norm, certainly in the bigger deals being concluded. The report gives examples of the typology of trust vehicles utilised by private business to further their development objectives in compliance with the BBBEE mandate.

GastrowBloch Philanthropies conducted interviews with 21 philanthropic foundations with the objective of providing existing foundations and individuals who wished to establish foundations with information relating to common practice amongst South African foundations in relation to governance, endowments, financial management and grant-making. Of the 21 foundations only 67% had permanently invested capital amounting to R12.57bn. The remaining foundations distribute annually replenished donations.

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Based on the analysis of ecosystem actors, both in the private and public sectors and the issues and bottlenecks present, GEDI presents a strategy for action for investors, stakeholders, policy actors in directing their resources towards generating the greatest impact for entrepreneurs in the country. The report offers a national entrepreneurship policy framework based on the strengths and weaknesses and causal factors that define the entrepreneurship ecosystem. Some of the recommendations emanating from the GEDI policy tool were (1) continue to build on the work already underway towards eliminating the dual economy by increasing start-up skills, improving education and training for all South Africans as well as remove most regulations that hinder the starting of a business; (2) improve the financing of SME and entrepreneurs by engaging in bank reform, mobile banking and crowd funding for all South Africans; and (3) build global brands and further integrate South Africa into the digital revolution by making digital access available to all.

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The rapid growth of crowdfunding globally has led some in the development sector to see the crowd as a potential solution to the funding challenges innovative businesses face when they try to serve the ‘bottom of the pyramid. The study systematically and comprehensively reports the size and growth of crowdfunding and peer-to-peer lending markets in Africa and the Middle East. The study details the types of online alternative finance, ranging from reward-based crowdfunding to peer-to-peer business lending, it captures the industry volumes in key markets, documents the growth of alternative funding for start-ups and SMEs, analyses the latest market trends and explores the changing regulatory landscape in Africa and the Middle East.

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The survey aims to provide a comprehensive and deeper understanding of the trends in the private equity industry and has done so since 1999. The survey found that funds under management grew from R158.8 billion in 2015 to R171.8 billion in 2016 reflective of a growing industry and an increased interest from investors in the private equity asset class in Southern Africa. This however represented a significant drop compared to the amount of R27.5bn raised in 2015. 70% of the funds raised in 2016 are for early stage investments.

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The research aims to assess the perceived and measurable impact of private equity and venture capital in South Africa. Relying on the assumption that the contribution of private equity is best measured by analysing the economic performance of investee companies, the report charts the impact of private equity investment on a number of different areas: growth before and after investment; innovation and new product development; job creation; corporate governance structures; and Black Economic Empowerment (BEE). Some of the findings of the research provide strong evidence that private equity firms create value and employment in both the domestic and international markets with firms investing significantly in capital expenditure and research and development.

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This high-level literature review outlines the funding landscape that supports the development of technology enterprises. The reports also provides profiles of the top 20 performing countries based on their startup entrepreneurship ecosystems, with the aim that South Africa identify key enablers and emulate the processes that made those ecosystems successful and apply them to its own nascent and emerging local startup ecosystem.

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The inquiry was initiated to advance policy options to improve the financial system’s effectiveness in mobilizing capital towards a green and inclusive economy. This study outlines South Africa’s financial system and the challenges and innovations in aligning it to sustainable development.

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This input paper reviews the experience of the Sustainable Banking Network (SBN), a group of banking regulators and associations from 24 emerging markets focused on enabling frameworks for environmentally and socially sustainable lending. From this, it identifies continuing barriers to sustainable banking, as well as critical success factors in the efforts to date. It closes with some options for consideration by the G20 Green Finance Study Group.

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This reports presents the results of an anonymous online survey conducted by SAVCA of the top 100 pension funds in South Africa and of the major pension funds in the Southern African Development Community (SADC) region. Of the 39 respondents, 14 South African funds implemented private equity programmes. The survey observed that defined contribution and standalone funds are less likely to allocate funds for private equity investment; size is not singular determinant of the appetite for private equity investment; pension funds with an existing private equity mandate and which are already invested into the asset class are most likely to consider an increased allocation through new investment partnerships and are also more familiar with the process of private equity investment; and the main impediments to private equity investment are liquidity concerns and limited familiarity with the asset class amongst pension fund managers, principal officers and trustees.

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This South Africa roadmap was developed through industry consultation and sets out recommendations to ensure that the modern interpretation of fiduciary duty is reflected in the practice of South African institutional investors . It provides recommendations on how to ensure institutional investors integrate ESG factors into their investment decisions. It also sets the South African capital market in a broader international context as regulators and investors respond to a rapidly-changing investment environment.

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This guide is aimed at pension fund trustees and principal officers to assist them to respond effectively to the business case for responsible investment, with specific reference to Regulation 28 of the South African Pension Fund Act and other complementary frameworks such as the Code for Responsible Investing in South Africa (CRISA). The majority of pension funds are at the early stages of responsible investment implementation and Regulation 28 does not include detailed guidance on how the mandate must be met. While the guide is not prescriptive, it gives trustees guidance on how best to give effect to responsible investment, as enabled in Regulation 28.

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The Renewable Energy Independent Power Producer Procurement (REIPPP) programme obliges companies – within a 50km radius of a project site – to contribute towards local community development through socio-economic and enterprise development, local ownership and local job creation. This report sheds light on the initial implementation experiences of the REIPPP and explores emerging evidence of local community development schemes established by the renewable energy industry and proposes steps to overcome emerging challenges. The report estimates, based on the 64 REIPPP projects awarded in the first three procurement rounds, approximately R1.17 billion will be available for local community development through socio-economic development, enterprise development and local ownership requirements over the next 20 years.

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The King Report on Corporate Governance is a booklet of guidelines for the governance structures and operation of companies in South Africa. The fourth revision was published in 2016. The code is non-legislative and is based on principles and practices pertaining to leadership, sutainability and good corporate citizenship. All JSE companies are required to comply with the principles and The Institute of Directors in Southern Africa (IoDSA) is the custodian of the King reports and the holder of their copyrights.

This review showcases outstanding models and practices making up the innovative finance ecosystem across Africa. The review highlights specific impact themes and business models as well as walking the reader through new financials tools and products with the potential to shift the system.

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The African Investing for Impact (AIFI) Barometer provides a snapshot of the growing investing for impact (IFI) market and strategies implemented by fund managers in East, West and Southern Africa. The 2016 edition has expanded its coverage of Africa’s formal investment markets as it strives to objectively depict the spectrum of publicly reported investments, which seek to combine financial returns and positive impact on society and the environment. It also provides a scoring system to gauge impact of IFI strategies employed.

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This guide to is aimed at Social Enterprises that need to access funding to grow and scale their businesses. It is designed to assist small and medium sized social enterprises to navigate the myriad of different funding mechanisms and channels and gives practical advice on how to prepare for the application and due diligence processes.

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The FTSE/JSE Responsible Investing Index Series is comprised of the FTSE/JSE Responsible Investment Index and FTSE/JSE Responsible Investment Top 30 Index. This document sets out the ground rules for the management and construction of the FTSE/JSE Responsible Index Series. The index series has been designed to identify South African companies with leading environmental, social and governance practices.

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A series of thought pieces in PE sector reflecting the opinion of a spectrum of LPs and fund managers. A range of investment mandates and approaches are presented and analysed, with regards to topics such as fund structuring, fund raising, collaboration and exits.

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The Entrepreneurial Ecosystem map is an infographic that profiles all organisations that support entrepreneurial development in South Africa identifying the direct finance providers and capacity development providers.

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This Standard sets requirements for members on the treatment of unclaimed assets and is intended to assist ASISA members in achieving the outcomes of Treating Customers Fairly (TCF). The standard aims to enhance tracing procedures, disclosure to customers, provide clarity on the principles applied in determining the assumed investment return and to achieve consistent treatment, as far as practically possible, of unclaimed assets by ASISA member companies regardless of product categories.