Bound to Impact: a best practices guide to term sheets in African Impact Investing deals

This study focuses on the Impact Investing industry in sub-Saharan Africa through a comparative analysis of three industry-leading institutions' term sheets. A key output of this exploratory research is the development of a best practices guide to social and environmental covenants (clauses inc...

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Bibliographic Details
Main Author: Pepper, Nicholas
Other Authors: Patton, Aunnie
Format: Dissertation
Language:English
Published: University of Cape Town 2018
Subjects:
Online Access:http://hdl.handle.net/11427/28983
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spelling ndltd-netd.ac.za-oai-union.ndltd.org-uct-oai-localhost-11427-289832020-10-06T05:11:03Z Bound to Impact: a best practices guide to term sheets in African Impact Investing deals Pepper, Nicholas Patton, Aunnie McPherson, Sharron Development Finance This study focuses on the Impact Investing industry in sub-Saharan Africa through a comparative analysis of three industry-leading institutions' term sheets. A key output of this exploratory research is the development of a best practices guide to social and environmental covenants (clauses included in the term sheet). The researcher has compiled primary data through practitioner interviews; secondary data was compiled by analysing executed legal documents and templates. The process was conducted with academic rigour in order to categorise and compare specific information. Preliminary research involved the researcher exchanging with a DFI and two commercial Impact Investors. The DFI provides both equity and debt, whereas one of the commercial Investors specialises in private equity and the other in private debt. The institutions are industry agnostic. The study has the objective to test two linked null hypotheses:  Impact Investors do not align their terms sheets to their values; and  Impact Investors do not require that certain clauses be systematically included in order to protect their interests Through case studies, the research initially develops on the key elements of an equity term sheet and provides a fictitious debt term sheet as a reference. Equity and debt legal documents are compared and analysed independently. After having isolated and analysed social and environmental covenants, the researcher concludes that neither hypothesis can be rejected. Further research is recommended limiting the scope to a specific industry or a specific asset class. Understanding and comparing Development Finance Institutions' methods would be of value. A quantitative analysis would isolate the success factors and appropriate constraints on the legal documentation in order to maximise financial and social and environmental returns. 2018-11-02T09:31:34Z 2018-11-02T09:31:34Z 2016 Master Thesis Masters MCom http://hdl.handle.net/11427/28983 eng application/pdf University of Cape Town Faculty of Commerce Research of GSB
collection NDLTD
language English
format Dissertation
sources NDLTD
topic Development Finance
spellingShingle Development Finance
Pepper, Nicholas
Bound to Impact: a best practices guide to term sheets in African Impact Investing deals
description This study focuses on the Impact Investing industry in sub-Saharan Africa through a comparative analysis of three industry-leading institutions' term sheets. A key output of this exploratory research is the development of a best practices guide to social and environmental covenants (clauses included in the term sheet). The researcher has compiled primary data through practitioner interviews; secondary data was compiled by analysing executed legal documents and templates. The process was conducted with academic rigour in order to categorise and compare specific information. Preliminary research involved the researcher exchanging with a DFI and two commercial Impact Investors. The DFI provides both equity and debt, whereas one of the commercial Investors specialises in private equity and the other in private debt. The institutions are industry agnostic. The study has the objective to test two linked null hypotheses:  Impact Investors do not align their terms sheets to their values; and  Impact Investors do not require that certain clauses be systematically included in order to protect their interests Through case studies, the research initially develops on the key elements of an equity term sheet and provides a fictitious debt term sheet as a reference. Equity and debt legal documents are compared and analysed independently. After having isolated and analysed social and environmental covenants, the researcher concludes that neither hypothesis can be rejected. Further research is recommended limiting the scope to a specific industry or a specific asset class. Understanding and comparing Development Finance Institutions' methods would be of value. A quantitative analysis would isolate the success factors and appropriate constraints on the legal documentation in order to maximise financial and social and environmental returns.
author2 Patton, Aunnie
author_facet Patton, Aunnie
Pepper, Nicholas
author Pepper, Nicholas
author_sort Pepper, Nicholas
title Bound to Impact: a best practices guide to term sheets in African Impact Investing deals
title_short Bound to Impact: a best practices guide to term sheets in African Impact Investing deals
title_full Bound to Impact: a best practices guide to term sheets in African Impact Investing deals
title_fullStr Bound to Impact: a best practices guide to term sheets in African Impact Investing deals
title_full_unstemmed Bound to Impact: a best practices guide to term sheets in African Impact Investing deals
title_sort bound to impact: a best practices guide to term sheets in african impact investing deals
publisher University of Cape Town
publishDate 2018
url http://hdl.handle.net/11427/28983
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