Third Billion Fund Proposal

802 views
701 views

Published on

The Third Billion Fund proposal was developed by Columbia Impact Investing Initiative’s (CI3) team comprised by Evgenia Sokolova, Sandra Halilovic, Helene Roy, and Vladimir Olarte for the International Impact Investing Competition held by the Federal Reserve in San Francisco on April 13, 2012. The proposal was chosen as one of the finalists among 40 applications from top management and public policy schools around the world.

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
802
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Third Billion Fund Proposal

  1. 1. Third Billion LLC
  2. 2. 870 million * women between ages 20 and 65 live outside the economic system*Source: Study by Booze & Co. Aguirre, DeAnne, and Karim Sabbagh. "The Third Billion."Strategy+Business May 2010
  3. 3. By 2025… * India China*Source: "Home | The Third Billion.” <http://thethirdbillion.org/>.
  4. 4. Women reinvest 90% of their income in families and communities* Women in management positions have 35% greater return on equity* Investing in women is smart economics When at least 10 % of a countrys girls attend school, its GDP increases on average by 3%**Sources: Study by the OECD, “DAC guiding principles for aid effectiveness, gender equality and women’s empowerment”, Endorsed by the DACSenior Level Meeting, December 2008“The economic power of women” Calvert Foundation http://www.calvertfoundation.org/the-economic-power-of-women
  5. 5. No property rights No land rights Labor policy Unequaldiscrimination Market restrictionsaccess to education Unequal payDiscrimination at workplace Poor childcare servicesLower status of women in society Poverty Lack ofcritical resources Denied credit Fewereducational opportunities No access to marketSocial restrictions Gender disparities Unableto participate in the supply chain Lack ofentrepreneurial opportunities Lack accessUnequal access to vocational educationto basic banking services Limitedentrepreneurial skills No access to market
  6. 6. No property rights No land rights Labor policy Unequaldiscrimination Market restrictionsaccess to education Unequal payDiscrimination at workplace Poor childcare servicesLower status of women in society Poverty Lack ofcritical resources Denied credit Fewereducational opportunities No access to marketSocial restrictions Gender disparities Unableto participate in the supply chain Lack ofentrepreneurial opportunities Lack accessUnequal access to vocational educationto basic banking services Limitedentrepreneurial skills No access to market
  7. 7. No property rights No land rights Labor policy Unequaldiscrimination Market restrictionsaccess to education Unequal payDiscrimination at workplace Poor childcare servicesLower status of women in society Poverty Lack ofcritical resources Denied credit Fewereducational opportunities No access to marketSocial restrictions Gender disparities Unableto participate in the supply chain Lack ofentrepreneurial opportunities Lack accessUnequal access to vocational educationto basic banking services Limitedentrepreneurial skills No access to market
  8. 8. No property rights No land rights Labor policy Unequaldiscrimination Market restrictionsaccess to education Unequal payDiscrimination at workplace Poor childcare servicesLower status of women in society Poverty Lack ofcritical resources Denied credit Fewereducational opportunities No access to marketSocial restrictions Gender disparities Unableto participate in the supply chain Lack ofentrepreneurial opportunities Lack accessUnequal access to vocational educationto basic banking services Limitedentrepreneurial skills No access to market
  9. 9. No property rights No land rights Labor policy Unequaldiscrimination Market restrictionsaccess to education Unequal payDiscrimination at workplace Poor childcare servicesLower status of women in society Poverty Lack ofcritical resources Denied credit Fewereducational opportunities No access to marketSocial restrictions Gender disparities Unableto participate in the supply chain Lack ofentrepreneurial opportunities Lack accessUnequal access to vocational educationto basic banking services Limitedentrepreneurial skills No access to market
  10. 10. A Tiered Investment Fund Return: 15% Retirement and Pension Funds EquityFinancial Return Growth SMEs Return: 7% Fund University Endowments Debt Higher Return: 2% Education Fund Family Foundations India PRI Legal Protection Fund Social Return
  11. 11. Access to Higher EducationHOLISTIC APPROACH Access to Capital Access to Legal Protection Year1 Year 3 Year 7 STAGGERED IMPLEMENTATION
  12. 12. Geographic Focus on Latin America Mexico Colombia 60% of Latin American Brazil Women* Economic Potential Synergies Team Networks*Source: IHS Global Insight
  13. 13. THIRD BILLION LLC Enhance economic contribution of women by investingin their education, entrepreneurship, and legal protection
  14. 14. Country Tertiary School Enrollment Rate in 2010* Mexico 26% Colombia 40% Brazil 41% Higher Education Fund Debt capital in financial Diana institutions and social Mexican enterprises Engineering Student Providing student loans to low income and talented women Promote programs that develop entrepreneurial capacity Phase I Phase II Phase III*Source: World Bank’s World Development Indicators
  15. 15. Oriana, ColombianMBA Student in the US Fund Size: $60 million IRR (interest rate): 7% Investment Size Range: $5 – $20 million Hold Period: 5 years Target: 2,000 students Management fee: 1.5% Phase I Phase II Phase III
  16. 16. Growth SMEs FundEquity capital in growing Smalland medium size companiesLed by women or providingvaluable goods and servicesto low-income and vulnerable Evania, Evania, Brazilianwomen Areas: maternal health, housing, Goldman’s 10,000 Women nutrition, among others Gardening Tools Company Phase I Phase II Phase III
  17. 17. LeilaBrazilianCEO of Beleza Natural Fund Size: $50 million IRR: 15% Investment Size Range: $0.5 – $5 million Hold Period: 5 to 7 years Life of Fund: 7 years Management fee: 2.5% Phase I Phase II Phase III
  18. 18. Renata Brazilian Federation of Domestic Workers Legal Protection Fund Debt (PRIs*) NGOs helping women Accessing Institutions Using Property Getting a Job Building Credit Going to Court Simone Goldman’s 10,000 Women Fellow Phase I Phase II Phase III Gardening Tools* Program Related Investments
  19. 19. Fund Size: $5 million IRR (interest rate): 0%-2% Investment Size Range: $50,000 to $110,000 Hold Period: 5 to 7 years Management fee: 0.5%LauraMexican Phase I Phase II Phase IIIIndigenous Women’s House
  20. 20. 3rd Billion Partners Brazil Mexico ColombiaWomen SupportNetworksIncubators &AcceleratorsEvents and BusinessPlan CompetitionsImpact Investors
  21. 21. Monitoring and Evaluating Impact on Women 1. Women enrolled 2. Women completed Third Third Billion LLC will use GIIRs for: Billion • Transparency and accountability • Monitoring and comparing impact • Identifying potential investees LLC1. Female low-income clients (and total) 1. Women provided legal advice2. Female jobs maintained and created 2. Degree of change in legislation3. Female shareholders
  22. 22. Thank You
  23. 23. Appendix
  24. 24. Summary: Structure and Timeline Expected HoldTier Mission Asset Class Risk Mgmt Fee Return Period Access to Medium 3 to 5T1 Debt 7% 1.5% Education to Low years Access to Medium 5 to 7T2 Equity 15% 2.5% Capital to High years Access to 5 to 7T3 PRI 2% Low 0.5% Legal Protection years T1: Access to Higher Education T2: Access to Capital T3: Access to Legal 3 years 7 years 15 years
  25. 25. Organisational Structure: Investment Team Investment Committee CEO Advisory Board (2/3) Managing Directors (2) Business VPs and Development Principals (2) (1) Analysts and Associates (3)
  26. 26. Risks & Contingencies Risk Contingencies Companies with sustainable positive cash flowsNo secondary market Diversification of investees (geographies, sectorsLack of liquidity and individual assets.) Experienced management teamLack of track record Established approvals and monitoring process GIIRS ratingMission Drift Alignment of financial performance with demonstration of social impact Diversified nature of fund’s borrowers, rigorousPotential of a Loss selection criteria, track record and reputation of the fund manager
  27. 27. Example - Improving Legal Representation The 3rd Billion Fund will provide PRI to institutions whose missions address the following challenges*: • Accessing Institutions: improve women’s ability to interact with public authorities and the private sector in the same way as men • Using Property: improve women’s ability to access and use property based on the ability • Getting a Job: reduce restrictions on women’s work, such as prohibitions on working at night or in certain industries. This indicator also covers laws on work-related maternity and paternity benefits, retirement ages, sexual harassment and equal pay for equal work • Building Credit: reduce minimum loan thresholds in private credit bureaus and public credit registries, and improves tracking bureaus and registries that collect information from microfinance institutions; • Going to Court: improve the ease and affordability of accessing justice (small claims courts, as well as a woman’s ability to testify in court and initiate court proceedings.* Source 1: Study by IFC. “Removing Barriers to Economic Inclusion.” Women, Business and the Law 2012* Source 2: UN Women Report. “Progress of the World’s Women: In Pursuit of Justice.” UN Entity for Gender Equality 2011-2012
  28. 28. Improving Legal Representation Multiplier Effect: With less legal gender differentiation, more women work, own or run businesses** Source: Study by IFC. “Removing Barriers to Economic Inclusion.” Women, Business and the Law 2012
  29. 29. Evgenia Sokolova Sandra Halilovic Genia is pursing a Masters of Public Sandra is a Masters of Administration degree in International Affairs’ Candidate at Development Practice at Columbia Columbia University, concentrating University. Previously, Genia in International Finance and worked as a Vice President of Economic Policy (Finance track). Credit Portfolio Management and Research in the Natural Resources Sandra carries 5 years of professional experience, working in Team at JP Morgan Chase. investment banking in New York and London, in emerging market consulting, and for the World Bank’s InternationalShe graduated from Mount Holyoke with a Bachelor’s Finance Corporation.degree in Economics (cum laude) and received an She graduated from the University of Virginias McIntireInternational Relations Certificate from Sciences Po in School of Commerce with a B.S. in Commerce, concentratingParis. Originally from Moscow, Russia, Genia lived in in Finance. Originally from Bosnia, Sandra lived in Croatia,Canada, the US, UK and France. Norway, the US, and UK. Helene Roy Vladimir Olarte Helene is a Masters of International Vladimir is a Masters of Public Affairs’ Candidate at Columbia Administration’s Candidate at University, concentrating in Columbia University, concentrating in Sustainable Energy Policy. Prior to Economic and Political Development. her current studies, she received a Currently, he also serves as President Masters degree of Columbia Impact Investing Initiative in Management from Audencia Nantes School of and Director of the Center for Social Management in France. Entrepreneurship HUB Bogota. Helene has 3+ years of professional experience in the Prior to attending the MPA program, Vladimir worked for investment management industry most recently at UBS 5 years as a consultant at Kaiser Associates Latin America and Amundi Alternative Investments. and 2 years as the Lead Consultant of Invest Hong Kong in Helene is originally from France. South America. Originally from Colombia, Vladimir has lived in Brazil, the US, China, and South Africa.

×